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Characterisation of the Business Models for
Innovative, Non-Mature Production
Automation Technology
Antonio Maffei
Doctoral Thesis
School of Industrial Engineering and Management
Department of Production Engineering
The Royal Institute of Technology, Stockholm
December 2012
TRITA-IIP-12-09
ISSN 1650-1888
ISBN 978-91-7501-588-0
Copyright © Antonio Maffei
Evolvable Production System Group
Department of Production Engineering
The Royal Institute of Technology
S-100 44 Stockholm
Tryck: Universitetsservice US AB
“You are never dedicated to
something you have complete
confidence in. No one is fanatically
shouting that the sun is going to rise
tomorrow. They know it's going to rise
tomorrow. When people are fanatically
dedicated to political or religious faiths
or any other kinds of dogmas or goals,
it's always because these dogmas or
goals are in doubt.”
― Robert M. Pirsig, Zen and the Art of
Motorcycle Maintenance: An Inquiry Into
Values.
Gustav Doré’s vision of the eighth Bolge
"O frati," dissi, "che per cento milia
perigli siete giunti a l'occidente,
a questa tanto picciola vigilia
'O brothers, who amid a hundred thousand
Perils,' I said, ' have come unto the West,
To this so inconsiderable vigil
d'i nostri sensi ch'è del rimanente
non vogliate negar l'esperïenza,
di retro al sol, del mondo sanza gente.
Which is remaining of your senses still
Be ye unwilling to deny the knowledge,
Following the sun, of the unpeopled world.
Considerate la vostra semenza:
fatti non foste a viver come bruti,
ma per seguir virtute e canoscenza"
Consider ye the seed from which ye sprang;
Ye were not made to live like unto brutes,
But for pursuit of virtue and of knowledge
Dante Alighieri, Divina Commedia,
Translation: H.W. Longfellow
Inferno Ch. XXVI vv. 112-120
Manufacturing
companies
are
nowadays
facing
an
unprecedented series of challenges to their survival: global
competition and product mass-customization are the shaping forces
of tomorrow’s business success. The consequent need for agile and
sustainable production solutions is the utmost motivation behind
the development of innovative approaches which often are not in
line with the state of art. It is well documented that companies fail in
recognizing how such disruptively innovative approaches can yield
an interesting economic output. This, in turn, enhances the risk of
leaving the aforementioned promising technologies conceptually
and practically underdeveloped.
In the field of automatic
production systems the Evolvable Production System paradigm
proposes modular architectures with distributed, autonomous
control rather than integral design and hierarchical, centralized
control. EPS technology is thus disruptive: it refuses the present
paradigm of Engineer to Order in industrial automation by
proposing an advanced Configure to Order system development
logic.
This dissertation investigates the possibility of using the recent
sophisticated developments of the concept of Business Model as a
holistic analytical tool for the characterization and solution of the
issue of bringing disruptive and non-fully mature innovation to
proficient application in production environments. In order to purse
this objective the main contributions in the relevant literature have
been extracted and combined to an original definition of business
model able to encompass the aspects deemed critical for the
problem. Such a construct is composed of three elements: (1) Value
Proposition that describe the features of a technology that generates
i
value for a given customer, (2) the Value Configuration and the (3)
Architecture of the Revenue which describe the mechanisms that
allows to create and capture such value respectively.
The subsequent work has focused on the EPS paradigm as a
specific case of the overall problem. The first step has been a full
characterization of the related value proposition through an
innovative approach based on a bottom-up decomposition in its
elementary components, followed by their aggregation into
meaningful value offerings: with reference to the EPS paradigm
such an approach has disclosed an overall value proposition
composed of six potentially independent value offerings. This
collection of Value Offerings has then been used as a basis to
generate the EPS business models. In particular for each single
offering a possible set of necessary activities and resources has been
devised and organized in a coherent value configuration. The
resulting creation mechanisms have then been linked among each
other following a logical supplier-customer scheme for capturing the
value: this allowed establishing the architecture of revenue, last
element of the overall production paradigm. Finally the results have
been validated in a semi-industrial system developed for the
(IDEAS, 2010-2013) project through the individuation of the areas of
application of such business models.
Keywords: Evolvable Production Systems, Automatic Assembly
Systems, Business Models, Disruptive Innovation, Maturity of
Production Technology.
ii
I would like to express my deepest gratitude to my supervisor
Prof. Mauro Onori. He has the mental outlook and the multifaceted
knowledge of a genius. The huge structural help he has been
providing for this dissertation is just a minimal part of his overall
contribution to my personal growth during the past years. He
empowered me to missions beyond what I believed to be my
capabilities and he always took the first bullet. Sinceramente…
Grazie Mauro!
I owe true and earnest thankfulness to a large set of people
which have actively contributed to the conception of this work. My
co-supervisor Associate Prof. Daniel Semere has given a crucial
stimulus to my curiosity toward the object of my research and
followed it up with insightful discussions. My colleagues Dr. Luis
Ribeiro and Dr. Pedro Ferreira have been priceless steering forces
toward the achievement of such an endeavor.
I am obliged to many of my colleagues that supported me
throughout the years. My closest research associates and friends at
KTH, Tech. Lic. Pedro Neves, Tech. Lic. Hakan Akillioglu and João
Ferreira along with the international industrial and academic
partners of the EUPASS and IDEAS European collaborative projects
have largely contributed in shaping my thoughts and methods. A
particular mention goes to my friends at the department for
contributing to such a wonderful working environment: Andreas,
Lorenzo, Marcus, Anders, Mikael, Kerstin, Danfang, Victoria, Asif
and in general to all the teaching, administrative and support staff as
well, including all the young researchers and all the XPRES initiative
stakeholders.
iii
Thanks to all my family and in particular to my mother and
brother for being positive models and priceless references even
though we are most of the time geographically apart. For similar
reasons I like to thank all my friends in Italy, Sweden and all over
the world. My final and most deserved acknowledgment goes to my
fiancée Utkum whose unspoken support is literally beyond words.
iv
Author’s selected publications:
1. From Flexibility to Evolvability: ways to achieve SelfReconfigurability and Full-Autonomy, Maffei A., Dencker K.,
Bjelkemyr M., Onori M., 9th IFAC Symposium on Robot
Control, Syroco 2009, Gifu, Japan 9-12 September 2009.
2. A Preliminary Study of Business Model for Evolvable Production
System, Maffei A., Onori M. International Symposium on
Assembly and Manufacturing (IEEE ISAM 2009). Seoul,
Korea 17-20 November 2009
3. Evolvable Production System: Mechatronic Production Equipment
with Evolutionary Control, Maffei A., Onori M., Neves P.,
Barata J., Doctoral Conference on Computing Electrical and
Industrial Systems, DOCEIS 2010, Lisbon, Portugal, 22-24
February 2010
4. Evolvable Production Systems: Foundations for new Business
Models, Maffei A., Licentiate Thesis. School of Industrial
Engineering and Management - Department of Production
Engineering. The Royal Institute of Technology, Stockholm.
June 2010.
5. From Flexibility to true Evolvability: an introduction to the basic
requirements, Maffei A., Hofmann A., International
Symposium on Industrial Electronic, ISIE 2010, Bari, Italy, 4-7
July 2010
6. Evolvable Production System: a new business environment, Maffei
A.
International
Symposium
on
Assembly
and
Manufacturing (IEEE/ISAM 2011) Tampere, Finland, 25-27
May 2011
7. Evolvable Production Systems: environment for new business
models, Maffei A., Onori M., Key Engineering Materials:
v
Materials, Mechatronics and Automation, Volume 467, 15921597
8. Handling Complexity in Evolvable Production System Bjelkemyr
M., Maffei A., International symposium on Industrial
Electronic, ISIE 2010, Bari, Italy, 4-7 July 2010
9. Evolvable Assembly Systems: Latest Developments, Onori M.,
Maffei A., Barata J., 8th International Conference on
Evolvable Systems: From Biology to Hardware, Prague,
Czech Republic, 21-24 September 2008
10. Evolvable assembly systems: coping with variations through
evolution, Semere D, Onori M., Maffei A., Adamietz R.,
Assembly Automation Volume 28, Number 2, 2008
vi
Abstract .............................................................................................. i
Acknowledgment .......................................................................... iii
Publications ...................................................................................... v
List of Figures ................................................................................. xi
List of Tables .............................................................................. xviii
List of Abbreviations .................................................................... xx
Chapter 1. Introduction .................................................................. 1
1.1 Research Scope ................................................................................. 4
1.2 Aimed Contributions ....................................................................... 6
1.3 Synopsis of the Thesis ..................................................................... 8
Chapter 2. Literature search and Analysis ............................... 10
2.1 Automatic Assembly Technology................................................ 12
2.1.1 Connotation of the assembly process in manufacturing
enterprises ......................................................................................... 12
2.1.2 Assembly and Automation Technology .............................. 14
2.1.3 The Evolvable Production System Paradigm...................... 19
2.2 Innovation ....................................................................................... 26
2.2.1 Introduction ............................................................................. 26
2.2.2 Disruptive Innovation ............................................................ 28
2.3 Business Model ............................................................................... 32
2.3.1 Introduction ............................................................................. 32
2.3.2 Ascent of the concept of Business Model............................. 35
2.3.3 Literature Analysis of the Business Model concept ........... 36
vii
2.4 State of the art ................................................................................. 58
2.4.1 Introduction and supporting concepts................................. 58
2.4.2 Production paradigm and associated business model for
an AAS ............................................................................................... 60
2.4.3 Lifecycle of an AAS ................................................................. 63
2.5 Knowledge gaps ............................................................................. 65
2.6 Chapter Summary .......................................................................... 67
Chapter 3. Research Approach ................................................... 69
3.1 Introduction .................................................................................... 69
3.2 Problem Definition......................................................................... 71
3.3 Toward Plug to Order ................................................................... 78
3.4 Research Objectives and Requirements ...................................... 81
3.5 Research Hypotheses ..................................................................... 82
3.6 Research Methodology .................................................................. 85
3.7 Definition of the Validation Method ........................................... 87
3.8 Chapter Summary .......................................................................... 92
Chapter 4. Value Proposition of the Evolvable Production
System ............................................................................................. 93
4.1 Introduction .................................................................................... 93
4.2 Analytical Method ......................................................................... 94
4.3 Identification of the characterizing elements of an EPS from a
business perspective ............................................................................ 99
4.3.1 Simplified Cost Model for EPS ............................................ 104
4.3.2 EPS’ stepwise approach to automation .............................. 108
4.4 Characterization of the EPS’s atomic value offerings ............. 113
viii
4.4.1 Identification of the interdependencies among atomic
value offerings ................................................................................ 120
4.4.2 Definition of the EPS value offerings ................................. 168
4.5 Chapter Summary ........................................................................ 186
Chapter 5. Business Model for an EPS.................................... 188
5.1 Introduction .................................................................................. 188
5.2 Business Model: a working definition ...................................... 190
5.3 EPS Business Models ................................................................... 194
5.3.1 Creation of the value: activities and Value Configuration.
.......................................................................................................... 195
5.3.2 Capturing of the value: Architecture of the Revenue. ..... 258
5.4 Chapter Summary ........................................................................ 268
Chapter 6. Illustration and validity of the Results ............... 269
6.1 Introduction .................................................................................. 269
6.2 The IDEAS pre-demonstrator: background and limitations.. 271
6.3 Description of the IDEAS pre-demonstrator: from legacy
equipment to the first EPS ................................................................ 273
6.3.1 Hardware description........................................................... 275
6.3.2 Realization of the IDEAS Mechatronic Agents ................. 279
6.4 Proof of concept............................................................................ 281
6.4.1 Mapping of the pre-demonstrator’s experience in the given
description framework .................................................................. 282
6.4.2 Conditions of validity of the envisaged business models
.......................................................................................................... 283
6.5 Chapter Summary ........................................................................ 292
Chapter 7. Conclusion and future work ................................. 294
7.1 Pre-requisites ................................................................................ 294
ix
7.2 Results and discussion ................................................................ 297
7.3 Future Work .................................................................................. 304
7.4 Critical Review ............................................................................. 307
Bibliography ................................................................................ 310
x
Figure 1 Mind Map of the research domain ......................................... 11
Figure 2 Skills as conceptual link between Product Design and
Production System in EPS environment (adapted from
(Maffei, 2010)) ....................................................................... 21
Figure 3 Atomic and Composite skills in relation with the concept of
Module (adapted from (Maffei, 2010)) .............................. 22
Figure 4 Performance in time of disruptive and sustaining
innovation in respect with the mainstream market......... 30
Figure 5 Gartner’s Hype Cycle compared with the NASDAQ Index
between 1998 and 2003 ........................................................ 36
Figure 6 Evolution of the business model concept (adapted from
(Osterwalder et al., 2005)).................................................... 39
Figure 7 Business model concept hierarchy (adapted from
(Osterwalder et al., 2005) )................................................... 41
Figure 8 The business model mediates between the technical and
economic domains (adapted from (Chesbrough and
Rosenbloom, 2002)) .............................................................. 43
Figure 9 Pure Science vs. Technology: basic research and condition
for progress in applied research ......................................... 44
Figure 10 Relationship between Activities and resources (adapted
from (Osterwalder, 2004)) ................................................... 52
Figure 11 Market segment for EPS technology: external and internal
................................................................................................. 54
Figure 12 Architecture of the Revenue.................................................. 55
Figure 13 Development of an AAS: Engineer to Order paradigm and
associated business models ................................................. 61
Figure 14 Lifecycle of an Automatic Assembly System...................... 63
Figure 15 Problem Definition 1: traditional innovation loop and
disruptive technologies ....................................................... 72
Figure 16 Initial gap between disruptive innovation performance
and mainstream market requirement ................................ 74
xi
Figure 17 Problem definition 2: need for new business models........ 76
Figure 18 Problem definition 3: overview ............................................ 77
Figure 19 Positioning of relevant approaches to automation in
relation to performance and underlying production
paradigm................................................................................ 80
Figure 20 Research Methodology overview ......................................... 85
Figure 21 Allegorical representation of the structure supporting the
original scientific value of the work................................... 89
Figure 22 Overview of the analytical method for the individuation of
the EPS value offerings ........................................................ 96
Figure 23 Tabulation of the AVOs classification ................................. 98
Figure 24 Overview of an EPS: elements and interconnections ...... 100
Figure 25 Matrix “Element/Lifecycle” for the identification and
characterization of the EPS’s AVOs. ................................ 104
Figure 26 Cash Flow associated with automation: EPS vs. Traditional
............................................................................................... 107
Figure 27 Graphical trend of the costs for a production system in
function of the production volume and for different
amount (i) of automatic stations in the system. ............. 110
Figure 28 Polynomial chain representing the locus of minimum cost
in function of the production volumes and for different
amount (i) of automatic stations in the system. ............. 111
Figure 29 Graphical calculation of the economically optimal instants
Ti of deployment for the (i+1)th automatic station ......... 112
Figure 30 Matrix “Elements/Lifecycle” and related symbolism for
the analysis and representation of the interdependencies
between the atomic offerings of an EPS .......................... 114
Figure 31 Classification and synthetic description of the possible
combinations between relationships and precedencies in
the “Elements/Lifecycle” graphical analysis ................. 117
Figure 32 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 123
Figure 33 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 125
xii
Figure 34 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 126
Figure 35 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 127
Figure 36 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 129
Figure 37 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 131
Figure 38 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 133
Figure 39 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 134
Figure 40 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 136
Figure 41 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 137
Figure 42 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 140
Figure 43 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 142
Figure 44 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 143
Figure 45 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 145
Figure 46 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 146
Figure 47 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 148
Figure 48 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 149
Figure 49 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 150
xiii
Figure 50 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 151
Figure 51 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................. 153
Figure 52 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 155
Figure 53 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 157
Figure 54 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 158
Figure 55 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 160
Figure 56 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 161
Figure 57 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 163
Figure 58 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 164
Figure 59 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 166
Figure 60 The EPS “Elements/Lifecycle” matrix: characterization of
............................................................................... 167
Figure 61 The EPS “Elements/Lifecycle” matrix: characterization of
................................................................................ 168
Figure 62 Domains of exploitation for the EPS elements ................. 172
Figure 63 Aggregated value offering of an EPS for the end-user:
............................................................................. 175
Figure 64 Aggregated value offering for of an EPS the workstation
supplier:
........................................................ 177
Figure 65 Aggregated value offering for of an EPS the workstation
supplier:
...................................................... 179
Figure 66 Aggregated value offering for of an EPS the workstation
supplier:
.......................................................... 180
xiv
Figure 67 Aggregated value offering for of an EPS the workstation
supplier:
........................................................ 182
Figure 68 Aggregated value offering for of an EPS the Mechatronic
agent provider:
............................................ 184
Figure 69 Summary of the relevant patterns for the EPS value
offerings ............................................................................... 185
Figure 70 Graphical summary of the liaisons among chapters 2, 3
and 4 with the contribution presented in Chapter 5 ..... 189
Figure 71 Working definition of Business Model .............................. 192
Figure 72 Notation for the Graphical representation of activities and
related resources ................................................................. 196
Figure 73 Aggregated value offering of an EPS for the end-user:
............................................................................. 197
Figure 74 Creation of the workflow: graphical representation ....... 199
Figure 75 EPS concurrent process-equipment identification ........... 200
Figure 76 Continuous improvement of the current workflow:
graphical representation .................................................... 201
Figure 77 Maintenance of the workflow: graphical representation 201
Figure 78 Multiple sources of the EPS building blocks .................... 202
Figure 79 Example of coopetition among EPS end-users: a virtual
shared repository for the modules. .................................. 203
Figure 80 Creation of the EPS: graphical representation .................. 204
Figure 81 Renewal of the EPS: graphical representation.................. 205
Figure 82 Run the production: graphical representation ................. 206
Figure 83 Aggregated value offering of an EPS for the workstation
supplier:
........................................................ 209
Figure 84 Configuration of a workstation: graphical representation
............................................................................................... 210
Figure 85 Creation of a workstation in the EPS domain .................. 211
Figure 86 Maintenance of the workstation: graphical representation
............................................................................................... 212
Figure 87 Renewal of the workstation: graphical representation ... 213
xv
Figure 88 Aggregated value offering of an EPS for the Multi-Agent
System supplier:
........................................ 216
Figure 89 Creation of the EPS Multi-Agent System: graphical
representation ..................................................................... 217
Figure 90 Renewal of the EPS Multi-Agent System: graphical
representation ..................................................................... 218
Figure 91 Maintenance of the EPS Multi-Agent System: graphical
representation ..................................................................... 219
Figure 92 Aggregated value offering of an EPS for the platform
supplier:
.......................................................... 222
Figure 93 Generic transport skill and instantiations ......................... 223
Figure 94 Creation of the EPS platform units: graphical
representation ..................................................................... 224
Figure 95 Maintenance of the platform unit: graphical representation
............................................................................................... 225
Figure 96 Aggregated value offering of an EPS for the module
supplier:
........................................................ 226
Figure 97 Creation of the EPS production module: graphical
representation ..................................................................... 228
Figure 98 Maintenance of the production module: graphical
representation ..................................................................... 229
Figure 99 Aggregated value offering of an EPS for the Mechatronic
Agent:
........................................................... 232
Figure 100 Collection of Mechatronic agents: user-supplier direct
trade...................................................................................... 233
Figure 101 Collection of Mechatronic agents: MA provider with
suppliers’ risk ...................................................................... 234
Figure 102 Collection of Mechatronic agents: MA provider with own
risk ........................................................................................ 235
Figure 103 Creation and maintenance of a skill/equipment offer:
graphical representation .................................................... 236
Figure 104 Providing the Mechatronic Agents for the EPS: graphical
representation ..................................................................... 237
xvi
Figure 105 Providing maintenance for Mechatronic Agents:
graphical representation .................................................... 238
Figure 106 Own repository for the transfer of EPS elements among
different end-users ............................................................. 239
Figure 107 Transferring the Skill/equipment among different endusers: graphical representation ........................................ 240
Figure 108 Graphical summary of the relevant activities and
resources of the EPS stakeholders .................................... 257
Figure 109 Graphical notation for the Architecture of the Revenue
............................................................................................... 259
Figure 110 Graphical layout of the Architectures of the Revenue in
the EPS value creation network ........................................ 262
Figure 111 Business model’s validation approach ............................ 270
Figure 112 Domain of study of the IDEAS pre-demonstrator in
relation with a value proposition’s lifecycle. .................. 272
Figure 113 Overview of the MiniProd system ................................... 275
Figure 114 IDEAS Pre-demonstrator: the transportation system.... 276
Figure 115 IDEAS pre-demonstrator: the assembly workstations .. 277
Figure 116 IDEAS pre-demonstrator: the stacker unit...................... 278
Figure 117 Combo200 from ELREST ................................................... 278
Figure 118 IDEAS pre-demonstrator: hardware representation of the
mechatronic resource agents ............................................. 279
Figure 119 Overview of the IDEAS Rapid Module Integration
Components used for the pre-demonstrator (adapted
from (IDEAS-Deliverable2.3, 2012))................................. 281
Figure 120 IDEAS pre-demonstrator: value proposition and related
stakeholders ........................................................................ 282
Figure 121 IDEAS pre-demonstrator: layout of the conceptual
business relationships ........................................................ 284
Figure 122 Qualitative influence of the technological maturity of an
innovation on the definition of the three elements of the
related business model ...................................................... 301
xvii
Table 1 Comparison among DAS, FAS and EPS ................................. 25
Table 2 Different understanding of the concept of Business Model
(adapted from (Zott et al., 2010)) ........................................... 37
Table 3 Relationship among the business model’s elements through
the concept of value ................................................................. 46
Table 4 Value configuration: creation logic, interactivity relationship
logic (adapted from (Osterwalder, 2004)) ............................ 50
Table 5 Summary of EPS Agent typologies: based on
(IDEAS-Deliverable1.4, 2011) ............................................... 102
Table 6 Summary of the indexes for the EPS elements ..................... 121
Table 7 Summary of the indexes for the lifecycle stages .................. 121
Table 8 Summary of the relationships among the End-User and the
other EPS stakeholders.......................................................... 207
Table 9 Summary of the relationships among the Workstation
Supplier and the other EPS stakeholders ........................... 214
Table 10 Summary of the relationships among the MAS supplier and
the other EPS stakeholders ................................................... 220
Table 11 Summary of the relationships among the Platform Supplier
and the other EPS stakeholders ........................................... 225
Table 12 Summary of the relationships among the Module Supplier
and the other EPS stakeholders ........................................... 230
Table 13 Summary of the relationships among the MA provider and
the other EPS stakeholders ................................................... 241
Table 14 Abbreviations for the stakeholders' denominations ......... 242
Table 15 Abbreviations for the Value Configurations' denominations
.................................................................................................. 242
Table 16 Overview of the activities and resources of the End-user 247
Table 17 Overview of the activities and resources of the Workstation
supplier ................................................................................... 249
Table 18 Overview of the activities and resources of the Multi-Agent
System supplier ...................................................................... 251
xviii
Table 19 Overview of the activities and resources of the Platform
supplier ................................................................................... 252
Table 20 Overview of the activities and resources of the Module
supplier ................................................................................... 253
Table 21 Overview of the activities and resources of the Mechatronic
Agent provider ....................................................................... 256
Table 22 List of the interfacing economic activities........................... 259
Table 23 List of the pricing methods ................................................... 260
Table 24 The EPS value creation network: summary of the active
“supplier-user” relationships ............................................... 261
Table 25 Summary of the Architecture of the Revenue in the EPS
value network......................................................................... 267
Table 26 Business relationships in the IDEAS Pre-D experience .... 285
xix
AAS- Automatic Assembly System
AVO- Atomic Value Offering
CTO- Configure To Order
EAS- Evolvable Assembly System
ES- Equipment Supplier
ETO- Engineer To Order
FAS- Flexible Assembly System
FMS- Flexible Manufacturing System
IMS- Intelligent manufacturing System
MA- Mechatronic Agent
MRA- Machine Resource Agent
CLA- Coalition Leader Agent
TSA- Transportation System Agent
AMI- Agent to Machine Interface
PA- Product Agent
MAS- Multi-Agent System
Pre-D- IDEAS Pre-demonstrator
PTO- Plug To Order
RAS- Reconfigurable Assembly System
RMS- Reconfigurable Manufacturing System
SI- System Integrator
WS- Workstation
WF- Workflow
xx
Global competition along with turbulent markets, shorter
product life-cycles and increasing demands for customization are
forcing the manufacturing firms to enhance their product-related
performances in term of lead-time, variety and cost. Such
competitive environment has, in turn, a dramatic impact at shop
floor level: the key success factor for the OEMs nowadays is no
longer the static optimization of their technological assets but rather
their dynamic and continuous adaptation to the productive context
(agility) at as low cost as possible and minimal ecological and social
impact (hence sustainability).
In view of this, companies need solutions for their production
system that are both sustainable and agile. With reference to capitalintensive facilities such as automatic manufacturing and assembly
installation this means to have the possibility to use them efficiently
for long periods of time and for different purposes. In other words,
the system must be able to add value to different products families
throughout different consecutive generations. Current approaches to
production automation are far from yielding such performances.
Automatic Manufacturing and Assembly Systems (hence AMS and
AAS respectively) are built around a specific set of
foreseeable/predicted tasks and their reuse is limited to the
reintegration in new systems of the valuable components such as
industrial robots or asynchronous handling systems. Referring to a
generic product-production system’s taxonomy AMS and AAS are,
1
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
nowadays, prototypic objects built following the “Engineer to
Order” paradigm.
In the field of manufacturing, general purpose and processoriented equipment, such as multi-axis machine tools, provides, for
the end-user of such installation, a good option to counter the
aforementioned issues: the same cannot be stated for the assembly
domain. As (Whitney, 2004) remarks assembly has always been
carried out by human workers that inherently knew how to do it.
The first attempts to study such process with a scientific approach
date back only a few decades when automation technology started
to be applied for tasks that were too monotonous, dangerous or with
special requirement of strength or precision which could not aligned
with human workers’ skills. Still, nowadays, a vast majority of the
assembly tasks are done manually. In consequence of this the
amount and the quality of available knowledge in this field is scarce
if compared to other processes always present in mankind’s history
such as metal casting, cutting or surface treating. This, in turn, is one
of the reasons why the offer of advanced solutions for the automatic
assembly is poor if compared to the other manufacturing activities:
the actual processes have never been studied and formalized.
Technology has already provided plenty of adequate ideas
regarding how to steer the development of a future generation of
automatic assembly system in line with the challenges portrayed
above. The development of more and more tiny and powerful
computational units allows embedding the necessary “intelligence”
even in small pieces of automation equipment. This has set the scene
for new production paradigms preaching the modularization of
hardware and software solutions which, in turn, enable a shift from
the described ineffective “Engineer To Order” approach to
dramatically better performing “Configure to Order” as described
by (Kratochvil and Carson, 2005). Although many different research
efforts such as (Jovane et al., 2008) and (EUPASS-ROADMAP, 2008)
among the others have highlighted these innovations since the early
2
Chapter 1. Introduction
2000’s, a closer look reveals that such proposed solutions are not
quite aligned with the current industrial practice. The reason is to be
found into the nature of such technologies in relation with
traditional approaches.
Modular architectures and distributed asynchronous control
system are radically different from current AAS which are based on
integral architectures and hierarchical sequential control logic. This,
in fact, leaves a huge practical gap between theoretically available
technologies and their actual application in the market for industrial
automation. This gap can be understood if one takes in account the
usual ways manufacturing system are improved. As they are a
critical resource for a manufacturing organization every change
must be carefully planned and executed: a small mistake in
managing such critical and capital-intensive resource can endanger
the survival of the firm itself. Given such premise it is easy to justify
a precautionary attitude of companies towards any modification in
their manufacturing system. Small cumulative improvements are
preferred and supported by the management much more than large
and abrupt ones which usually impose significant technical and
organizational challenges resulting in a much more uncertain
output.
Therefore, when confronted with either investing
substantial capital in automation to be kept in-house, or outsourcing
to low-wage countries, the companies opt for the latter. Note, also,
that no decisional models are made available to the decision-makers.
Another fundamental dimension of the problem is the one
related with the technological maturity of the solution. As indirectly
noted by (Nelson, 1959) in his essay on the economics of scientific
research the promising innovation still needs further private
research and development to be included into commercial products.
This requires that companies, along with their customers, must fully
understand the value proposition behind the technology and deem
it interesting. This is not always the case especially when the
innovation is disruptive as defined and described by (Christensen,
3
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
1997): disruptive innovations introduce a set of new attributes for
the customer of a given market while performing badly for wellestablished attributes valued by such customer. Companies which
are too close to their market often fail to recognize the potential of
such technologies over the current unfitness to present customer
needs.
The described scenario might seem like a paradox:
manufacturing companies are in urgent need of more agile and
sustainable production solutions but they don’t support and invest
in the right technologies because such innovations are not in line
with their current technologies and target market. Such behavior, as
seen above, is in fact perfectly rational. Along with a whole set of
new possibilities each technological improvement in manufacturing,
and especially in a knowledge intensive field like automation, has
also introduced a lot of challenges for the organization that have
decided to adopt them: (Zammuto and O'Connor, 1992) among the
others provide a large set of examples in which advanced
manufacturing technologies, not in line with previously established
practice, although very promising have yielded few or no benefits
for the adopting firms. One explanation for this can be found in the
classification proposed by (Tushman and Anderson, 1986): often
radically new production technologies can be regarded as
competence-destroying innovation. They, in fact, make some of the
previous expertise owned by the company useless while requiring
new skills. This, in turn, erodes the company tradition and political
constrains leading to management difficulties. Once again, there
seems to be no decisional or business models available to the
management in such phases.
Traditionally the problem of integrating a new technology in
production environment has been treated with different
4
Chapter 1. Introduction
perspectives and tools of analysis. This work proposes a holistic
approach based on the most up to date development and
characterization of the concept of business model as a set of
constructs aimed at describing and evaluating all the aspects of a
given value offer (see the following §2.3).
The utmost driver of success for a manufacturing firm is a
correct alignment of the technological input to all the activities
performed with their economic output. Consequently, the condition
for a successful application of any novel production paradigm is a
combination of up to date, diversified internal competencies and
wise use of external expertise aimed at optimizing the underlying
value management: in other words, according with (Chesbrough
and Rosenbloom, 2002), a winning business model. The problem
tackled in this dissertation revolves around the two main aspects
related with such issue in the given context:
1
2
how to define the value propositions that an innovative and nonfully mature disruptive technology offers,
which are the possible mechanisms and constructs that allow
creating and capturing such value.
Summarizing, this work aim at analyzing, from the holistic
perspective of the business model concept, all the multifaceted
issues related with the process of bringing to the market non-fully
mature, disruptive technologies. The necessary support along with a
valid case study has been offered by the emerging Evolvable
Production System paradigm (EPS paradigm or simply evolvable
paradigm). This innovative approach, which will be introduced later
on in Chapter 2, is the researched object of the (IDEAS, 2010-2013)
project (Instantly Deployable Evolvable Assembly Systems) where
most of the contributions underpinning this work have been
developed through discussion with experts from industry and
academia and finally tested on one of the demonstrators built within
such framework (see (Onori et al., 2012)).
5
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The aim of this work is to develop and illustrate a business
model based analytical approach suitable for the characterization of
disruptive technological innovation. Such objective has been
achieved in this dissertation through the following areas of
contribution:



6
Analysis of the current approach to characterize a
disruptive innovation and redefinition of such concept
through its integration with the related level of
technological maturity. This contribution aims to illustrate
and evidence the link between the technological maturity
and the disruptiveness of a given innovation. In fact, very
often disruptiveness is caused in fact by a lack of
development specifically targeting an application, so a
thorough analysis of the causes of this disruptiveness
provides indications as to how the particular technological
advancement may bring such innovation to the market.
Analysis of the adequacy of the current perception and
related use of the concept of Business Model and
redefinition of its role as holistic analytical tool for the
assessment of early stage disruptive technologies. The
proposed research aims at highlighting the potential behind
using the concept of business model as an analytical tool for
the early characterization of non-fully mature disruptive
technologies. The business model concept provides, in fact,
a broader perspective when compared with the traditional
approaches based on the single analysis of product,
organization, network or market.
Formulation of a three elements based definition of
business model which revolves around the concept of value.
In this thesis the business model is seen as a constructs that
reports on how companies define the target value offering,
Chapter 1. Introduction



how they create such a value and finally how they capture it.
These three activities can be described through three
elements
respectively:
value
proposition,
value
configuration and Architecture of the Revenue. The
business model definition spans beyond the focal firm to
encompass all the stakeholders involved with the
development of a complex object.
Formulation of a bottom-up approach to define the
different value offerings composing the value proposition
of a complex object. The study of the value proposition of a
non-fully mature technology, which is still far from any
actual market embodiment, is a fundamentally new
research purpose which, in turn, requires an innovative
approach. Thus this analytical tool proposes a full spatial
and temporal decomposition of a complex value
proposition. Crossing each temporal and spatial class
allows one to define a set of Atomic Value Offerings which
refer to a single element of the superior value proposition
in a single phase of its lifecycle.
EPS business models characterization. The constructs and
the methods described in the previous contribution have
been applied to a reference evolvable assembly system
developed according with the evolvable paradigm. Value
proposition, Value configuration and Architecture of the
Revenue have been assessed within the limited scope of the
dissertation. The outcome of such an analysis has then been
validated on a semi-industrial system developed as part of
the (IDEAS, 2010-2013) project.
Quantitative
analysis.
Exploiting
the
previous
contribution, the work presented provides also an
illustration of how one may integrate the qualitative results
of the analysis into a mathematical formalization that, in
turn, can be used to validate the fitness of the related
hypothesized business models.
7
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The evolvable paradigm and in particular the development
achieved during the first part of the related (IDEAS, 2010-2013)
project is the engine behind this research effort. The scientific target
of this project as well as the qualified environment featuring some of
the best academics and practitioners have provided the necessary
advancement to target the problem of bringing innovative
disruptive technology to the market.
The work first section is an interdisciplinary literature review
presented in Chapter 2. All the relevant domains for this work have
been introduced in their salient aspects, and the related
interconnections disclosed and explored. The studied instance of
innovative manufacturing technology, namely the evolvable paradigm
developed in the (IDEAS, 2010-2013) project, has been characterized
as disruptive technology. The reviewed business model concept
offered a promising and holistic approach for investigating the
strategies of bringing such technologies to market. The resulting
state of the art has finally been used as basis to describe the
knowledge gaps affecting the portrayed issues.
The consequent detailed problem definition, along with the
investigation of the related hypotheses, is presented in the Chapter
3. This chapter describes the research methodology and defines the
logical input underpinning the validity of the premises to the
following scientific contributions introduced in this dissertation.
The following Chapter 4 reports the research efforts dealing with
the focal, generative element of a business model: the value
proposition. In particular a bottom up approach is proposed to solve
the problem of assessing the value proposition of a non-mature and
disruptive technology. This method is then applied to the evolvable
paradigm technology and the resulting full characterization of the
value proposition of an Evolvable Production System is ultimately
8
Chapter 1. Introduction
presented. Consequently, besides the introduction of the developed
analytical method the knowledge contribution of the application
presented in this chapter enables the following formalization of the
EPS business models.
The literature review disclosed and highlighted the main
elements of a business model. Such building blocks are brought
together in an original unitary working definition proposed in
Chapter 5. This model supports two new constructs, the Value
Configuration, connected with the creation of the value, and the
Architecture of the Revenue related with the process of capturing the
created value. In the second part of this chapter the previously
individuated value proposition of an EPS is translated in the EPS
business model thank to the introduced blueprint.
Chapter 6 illustrates the potential use of the proposed approach.
It also provides the description of the conditions of validity for the
consequent EPS business models when applied to a semi-industrial
evolvable production system developed within the demonstration
activities of the (IDEAS, 2010-2013) project at FESTO, Esslingen .
Finally, Chapter 7 presents and discusses the resulting
knowledge contribution of this dissertation. A critical review of the
work, along with possible future enhancements of the research
efforts, is also included in this section.
9
This chapter has a double purpose: (1) introducing the current
conceptual embodiment and consequent knowledge gaps related to
the technological domains of this thesis and (2) presenting all the
concepts underpinning the related scientific contributions. The
consequent literature analysis is articulated in three main parts.
Firstly, the domain of assembly automation is briefly characterized:
from the traditional approaches to the most recent and innovative
ones. This sets the scene for a broad description which encompasses
all the salient aspects of the focal evolvable paradigm. In order to
frame the disruptiveness of such an approach, a description of the
pertinent aspects of the domain of innovation is reported in the
second section. Finally the concept of business model is introduced as
a necessary supporting construct to enable a fruitful investigation of
the innovative production technology transfer process.
The following Figure 1 introduces a mind map that summarizes
the structure given to the research domain. The relevant aspects of
the bodies of knowledge covered by the literature analysis, represented
by blue boxes, are connected with the contributions to this work,
represented by red boxes. The additional supporting concepts derived
from reviewed ongoing research activities are represented by
green/yellow boxes.
10
Chapter 2. Literature Search and Analysis
Competence
enhancer
Customer
perspective
Value
Chain
Value
Shop
Competence
destroyer
Innovation
Value
Configuration
Sustaining
Innovation
Market
perspective
Disruptive
Innovation
Value
Network
Interfacing
Economic
Activity
Business Models
Lifecycle
Architecture of
the revenue
Value
Proposition
Pricing
Offering
EPS: Value Proposition
and Business Models
Resource Agent
Mechatronic Agent
Automatic
Assembly System
Coalition
Leader Agent
Transport Agent
Dedicated
Automation
Flexible
Automation
HMI Agent
State of the Art
Innovative
Approaches
BMS
Atomic
Composite
Skill
Evolvable
Production System
Paradigm
Modularity
Pluggability
Hardware
Self-Organisation
HMS
Self-Learning
RMS
Self-Configuration
Self-Diagnosis
Autonomous
Multi-Agent
Control System
Scalability
Plug To Order
Configurable
Figure 1 Mind Map of the research domain
11
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Assembly is the crowning point of the manufacturing process.
Far from being simply the phase when all the parts of a product
come together, this activity is the common culmination where all the
upstream processes convey: from design to part logistics through
engineering and manufacturing. Consequently, as (Whitney, 2004)
pointed out, the assembly process is the key link between the unit
processes 1 and the top-level business processes. For instance,
extreme market segmentation aimed at disclosing and exploiting
any aspect of consumers taste results, according to (Pine and Davis,
1999), in a desired strategy of mass-customization. A rational
sequencing of the assembly operations allows companies to delay
the product differentiation bringing it closer to the market. Such an
approach is generally referred to as Assembly To Order: an extensive
description of the related salient features can be found in
(Wortmann et al., 1997). Properly designed assembly interfaces
enable a higher degree of parts mixing and matching: this, in turn,
permits to create custom products with minimum switching costs.
The integrative nature of assembly renders it even more
important in modern production scenarios where the competition is
no longer between single firms but rather between whole supply
chains. Along with the search for lower cost, such a trend originates
in the innovation process. New materials and technologies arise,
nowadays, at a pace that often exceeds the companies’ capability of
bringing in innovation. Consequently firms must focus on their core
competencies and rely on suppliers for design knowledge,
1
12
Processes aimed at the realization on the single product parts
Chapter 2. Literature Search and Analysis
production methods, and proprietary materials or even for parts or
subassemblies themselves. The necessary condition to implement
such a strategy is a proper definition of the subassemblies such that
they can be designed and produced independently. In other words,
a rational approach to assembly design is the main enabler of
effective outsourcing and supplier management strategies.
The rationalization of the assembly process has historically been
one of the most important driving forces behind several production
paradigm shifts. An example taken by (Womack et al., 1990) is the
rise of the age of mass production. In the age of craft production the
manufacturing of car parts were outsourced to different workshops.
Each craftsman used his own gauging system, thus when such parts
reached the assembly line they needed to undergo time-consuming
adjustment processes before being finally put together. Henry Ford
streamlined such processes by increasing the accuracy and
repeatability of fabrication machinery and by using the same
gauging system for every part. The dimensional robustness of the
resulting components eliminated the need for skilled fitters which
could be replaced by anyone able to attach two screws: this was the
dawn not only of interchangeable parts, but also of interchangeable
workers. In a second phase Ford enhanced the productivity of his
workers organizing them around the first moving assembly line.
Following this line of thought, several trends push nowadays
toward a rationalized automation of the assembly process:
miniaturization of the product, higher level of designed quality,
global competition of emerging economies with low labor costs
along with the aforementioned mass customization are some
examples taken from major roadmapping efforts such as (Jovane et
al., 2008). (Maffei, 2010), among many other authors, has noticed
how, although traditional approaches to automation do not yield
such required performance, promising innovative approaches are
hardly developed and implemented into industrial solutions. This
consideration is the generative problem behind this work. The following
13
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
paragraph will introduce the assembly automation domain
providing the foundations for the analysis consequently performed.
Automation technology entered the scene of assembly relatively
late compared to other traditional manufacturing process. The
reason is rather intuitive: while humans hardly possess the strength
and the precision necessary for several manufacturing tasks, they
have always been able to perform any required assembly task. The
only significant limitation during the rise of modern production,
was the component weight which, most of the time, was tackled
with specific supporting mechanisms. Performing any assembly task
involves many actions that stretch far beyond simply providing the
necessary relative movement to the involved parts. The, sometimes
hidden, side of supporting activities such as evaluation of part
quality, pre-orientation or inspection of the correct fit require a
dexterity that humans naturally possess but that can be extremely
challenging to mimic with machines.
In view of this the first automatic assembly systems (hence AAS)
were introduced, for relatively simple tasks such as cigarettes or
equally connoted products, only in the Twenties of the last century.
The embodiment of such systems included synchronous transport
lines connecting simple workheads devoted to basic assembly
processes and tests. Such approaches are referred to as fixed or
dedicated automation and are still nowadays a valid solution for the
assembly of large volumes of relatively simple products (such as ball
pens, electrical or pneumatic components or for packaging
solutions). These installations are unique solutions designed around
a given product, or product family: their reconversion to different
purposes is rather difficult, if not uneconomical. Unlike the general
purpose machine tools used for unit processes, a Dedicated Assembly
14
Chapter 2. Literature Search and Analysis
System (hence DAS) is rather a prototype developed according with
the Engineer-To-Order approach (hence ETO).
This has been the status of assembly automation until the advent
of the first industrial robots, applied to car spot welding in the late
1960s. The versatility of the robots enabled the rise of the so called
Flexible Assembly Systems (hence FAS). The industrial robot became
part of multi-purpose workstations which were able, in principle, to
accomplish a large variety of assembly tasks through
interchangeable tooling and adjustable software solutions. In
addition to that, the use of sensors to drive an asynchronous
transport system connecting the aforementioned workstations
conferred these new systems unprecedented capabilities of handling
production mix variations. As (Lee and Stecke, 1996) noticed, this
combination of such machine flexibility and routing flexibility is indeed
suitable to effectively cope with large product variety under steady
market conditions. Industrial robots can also support high volumes
of rather complicated products: the so called dexterous robots
allowed Sony to create completely new markets for portable music
(Walkman), videotaping (Handycam) and instant photos (Polaroid
camera).
As discussed above and remarked by (Christopher, 2000) the
utmost requirement for today’s enterprises is the capability to
quickly respond to the market evolution rather than optimize the
use of resources. This, in turn, call for agile manufacturing systems:
(Goldman et al., 1995) define such solutions as normally capable to
understand the changes and adapt consequently in order to profit
from it. Agile manufacturing systems allow companies to tackle the
critical requirements (identified by (Bi et al., 2008) that current
manufacturing environment poses: short lead time, more variants,
low and fluctuating volumes and low price. While the DAS have a
completely opposite purpose, highly flexible solutions might, in
principle, yield such performance. However this approach presents,
as pointed out by (Maffei et al., 2009) and (Maffei and Hofmann,
15
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
2010), several drawbacks. From the economic point of view an
automatic solution is profitable only when the uptime is high:
redundant or scarcely used equipment considerably lowers the
performance of an AAS in this respect. Moreover, with the
exploitation of a FAS, as they are traditionally conceived, requires
large initial investment and consequent high levels of financial
exposition. Finally, from the technical perspective, the flexibility of
such systems is limited to the predicted working and market
conditions. In view of this (ElMaraghy, 2005), concluded that FAS
are only economically viable in particular production scenarios
characterized by high number of variants and low-medium
production volumes.
The need to effectively meeting all the aforementioned
production requirements led to the emergence of a conceptually
homogenous set of innovative production paradigms that proposed
a substantial shift in the way automatic assembly system were
conceived and designed: from the traditional ETO to a more
effective Configure To Order 2 (hence CTO). The Reconfigurable
Manufacturing System (hence RMS) paradigm, among the others3, has
been defined by (Koren et al., 1999) as a system that targets mass
customization production strategies through the modularization and
rational management of hardware and software components.
(Blackenfelt and Sellgren, 2000), (Martin and Ishii, 2002) and (Erixon,
1998), among many other authors, have discussed the advantages of
a modular approach in respect to the portrayed scenarios.
Adaptability and scalability of the installation for product and
See KRATOCHVIL, M. & CARSON, C. 2005. Growing modular: mass
customization of complex products, services and software, Springer Verlag.
3 The concept of RMS is similar to several other paradigms, among
them: the modular manufacturing (Tsukune et al 1993), the componentbased manufacturing systems (Weston 1999), (Chirm et at. 2000), (Harrison
et al. 2001), the modular product system (Rogers et al. 1997) and the
modular flexible manufacturing (Kaula 1998)
2
16
Chapter 2. Literature Search and Analysis
volumes changes, along with shorter lead-times are the envisaged
outcome of such innovations.
The implementation efforts connected to RMS 4 , and to other
similar paradigms, have cumulatively built a growing awareness of
the technological challenges connected with the future of
manufacturing systems. In particular (Bi et al., 2008) identified and
thoroughly discussed the three critical issues that must be solved in
order to bring the RMS to full technological maturity: architecture
design, configuration design and control design. Although these issues
emerged in the RMS domain they will always arise any time similar
innovative approaches are proposed. Along with the already
mentioned modularity, other key features of an RMS architecture
are integrability, scalability, convertibility and diagnosability. In
consequence of this the RMS control system must at least be:
(1)
(2)
(3)
(4)
(5)
(6)
autonomously capable to integrate and coordinate the
module-level objectives into system-level objectives,
distributed through an embedded controller on each
module that becomes then an intelligent module,
open to new languages and data formats,
scalable and upgradable through the addition/removal
/upgrading of hardware components,
self-reconfiguring according to changes in the
underlying system configurations and
able to actively exploit the production experience
through learning mechanisms (real adaptability).
With reference to such requirements several control paradigms
have been proposed. The first example is the Bionic Manufacturing
paradigm inspired by the functioning of natural organs and
described by (Ueda, 1992) and (Okino, 1993). The building block of
There is a vast literature available. Some outstanding contributions
are: (Arai et al. 2002), (Asl et al. 2000), (Giusti et al. 1994), (Haas et al. 2002),
(Kalita et al. 2002) and (Lee 1997).
4
17
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
this approach is the so called modelon which is composed by other
modelons consequently organized in a hierarchy. Each modelon
abstracts a manufacturing task that is available for the high level
modelon that gathers through DNA-type information such submodelons in order to fulfill a manufacturing process specification
both at design level and at execution level. The resulting system is
generically referred as Bionic Manufacturing System (hence BMS).
Another interesting, similar, control paradigm is the one
underpinning the Holonic Manufacturing Systems (hence HMS). This
approach has been described by several authors 5 within the
Intelligent Manufacturing Systems (hence IMS) community. The
word holonic is inspired by (Koestler, 1968) definition of the holon
from the union of the Greek word holos (whole) and the suffix on
(part). A whole that is at the same time a part: this suggests the basic
assumption underlying the holonic manufacturing paradigm where
a holon can be made or can be part of other holons. Holons belong to
a society called holarchy where they must accomplish the production
task through coordination, communication, cooperation and
negotiation.
The approaches presented, along with several other similar
ones 6 , have remained conceptually underdeveloped and only
occasionally applied to real systems. On the other hand the efforts
devoted to their implementation have allowed the identification of
some interesting supporting technologies: (Mehrabi et al., 2000)
introduce an extensive review of the most promising ones.
(Monostori et al., 2006) described how Multi-Agent Systems (hence
MAS) have been traditionally used to support advanced
Among them the most important are (Markus et al 1996), (Gou et al.
1998), (Van Brussel et al. 1998) and (Babiceanu et al. 2006)
6 Other noteworthy approaches proposed are: Fractal Companies (Sihn
et al. 1998), Interactive Manufacturing (Ueda et al 1998) and Random
Manufacturing (Iwata et al. 1994)
5
18
Chapter 2. Literature Search and Analysis
manufacturing paradigms in several different domains 7 ; among
them: concurrent engineering (Balasubramanian et al., 1996), supply
chain management (Swaminathan et al., 1998), manufacturing
planning and scheduling (Shen et al., 2006) and many others. In
reference to the control paradigms the analysis of (Bussmann and
McFarlane, 1999) concluded that agent-based technology is suitable
to implement the described approaches in view of its inherent
capability to deal with autonomy, negotiation, distribution,
scalability and disturbances8.
Modularization of hardware and software solutions, along with
the use of a distributed control approach based on MAS, and
supporting the desired controlling behaviors are the two
cornerstones of the focal approach to automation of this thesis: the
Evolvable Production System (hence EPS) paradigm. The following
paragraph provides a general description of the principles behind
this innovative way of conceiving automatic production systems
along with the references to the main contributions developed in
this domain. In addition to that a portrait of the current embodiment
of this technology is also presented to serve as foundation for the
consequent analysis.
Not earlier than one decade ago (Onori, 2002) provided the first
general definition of the Evolvable Assembly System Paradigm (or
State of the art of agent implementation can be found in (Shen et al.
1999) and (Leitão 2009)
8 Many architectural approaches have been consequently proposed.
The following works introduces some of the most relevant ones: (Barata,
2005), (Bongaerts et al 2001), (Maturana 1996), (Maturana 1999), (Leitão et
al. 2006), (Van Brussel et al 1998), (Ribeiro et al. 2008)
7
19
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
simply the evolvable paradigm). In a following phase (Barata et al.,
2007a) and (Onori and Barata, 2009) described how the principles,
initially applied exclusively to assembly, could be extended also to
other manufacturing unit processes. The scope of the research effort
was consequently broadened to encompass the whole production
domain, thus the current notation Evolvable Production System was
introduced. During the following years and up to present an active
research community has extensively studied this research domain
which, in turn has expanded in different directions through a vast
amount of contributions: research requirements (Barata et al., 2006),
design support (Lohse, 2006) (Lohse et al., 2006), business process
(Maffei and Onori, 2011), diagnostics (Barata et al., 2007b) and
(Ribeiro, 2012), system deployment and description (Siltala et al.,
2009), system configuration (Ferreira et al., 2010) and (Ferreira, 2011)
and management of complexity (Frei et al., 2007), among others.
Most of the research efforts that shaped the EPS paradigm at an
early stage have been carried out within the large collaborative
European (EUPASS, 2004-2009) project.
An Evolvable Assembly System (hence EAS) is akin to the
previously described RAS as it is built upon an open and modular
architecture. In order to support such a proposition, as for the BMS
and HMS paradigms, the control approach is based on selforganization and self-configuration mechanisms attained at the cost
of autonomous behaviours at modular level. The novelty of the
approach is to be found in the characterization of modules as process
specific entities rather than function specific ones. An Evolvable
Production System is a collection of autonomous hybrid hardwaresoftware entities called Mechatronic Agents (hence MA). In detail
each MA is composed of:
1. The operative hardware: the pieces of production
equipment that deliver the required process
functionality.
20
Chapter 2. Literature Search and Analysis
2. The controlling hardware: typically a tiny controller
embedded on the operative hardware.
3. The control system embodied into a software agent that
controls a set of skills that represent the capability of
such a Mechatronic Agent.
The association between production processes and production
equipment is then achieved through this innovative concept of skill
(see Figure 3).
Evolvable
Production System
Product
requirements
Modules
Skill
Processes
Skill
Skill
Attributes
Parameters
Figure 2 Skills as conceptual link between Product Design and Production
System in EPS environment (adapted from (Maffei, 2010))
In the EPS environment the Skills are classified in Atomic (or
Basic) Skills and Composite (or Complex) Skills. In general an
Atomic Skill is directly associated with the manufacturing
components. “Move” is the Atomic Skill of a Robot. The Composite
Skills are on the other hand the skills emerging when more
21
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
manufacturing modules are put together and cooperate. A simple
example is visualized in Figure 4.
Atomic Skills
Robot
Feeder
Gripper
Move
Feed
Grasp
Composite Skills
Gripper
Robot
Pick&Place
Figure 3 Atomic and Composite skills in relation with the concept of Module
(adapted from (Maffei, 2010))
Composite skills refer to specific processes such as “Change
Tool” or “Insert” and they are the result of an aggregation of other
skills. The concept of composite skill is the enabler of the full
exploitation of the modular approach. Combining modules in order
to achieve complex capabilities is not a simple addition process. A
robot and a gripper together own the Complex Skill “Pick and
Place”.
After the EUPASS experience, the EPS community kept the
promising results alive through several follow up projects. The
larger research and development efforts within the EPS domain are
currently carried out within the European [IDEAS project]
framework. In the first stage this project has laid down the
theoretical foundations which can support the implementation of
the paradigm. In detail, (IDEAS-Deliverable1.4, 2011) describes a
System Architecture which encompasses all the required
22
Chapter 2. Literature Search and Analysis
Mechatronic Agents based on the requirements identified in
(IDEAS-Deliverable4.1, 2011). (IDEAS-Deliverable2.1, 2011) and
(IDEAS-Deliverable2.2, 2011) report on the adopted process model
and hardware description languages respectively. The consequent
first implementation in the IDEAS pre-demonstrator experience is
introduced in (IDEAS-Deliverable5.1, 2010).
Traditional control devices do not support agent platforms or
advanced programming techniques, thus particular attention has
been devoted to the adaptation of commercial tiny controllers which
can be embedded on single modules or workstations. IDEAS
provide the first such controller prototype at commercial level and
(IDEAS-Deliverable5.2, 2011) provides a description of such a
process. The conversion of legacy equipment into Mechatronic
Agents (agentification) will be further investigated in the recently
funded (XPRES-Project, 2010-). These activities set the scene for the
design and development of specific EPS modules, which, as argued
later on in this dissertation, can be supported by the definition of
suitable business models for such an installation.
A significant effort in the EPS domain, as well as in the modern
manufacturing research community, is devoted to achieve an
autonomous behavior of the production system. IDEAS has
investigated and reported in (IDEAS-Deliverable4.2, 2011) the
requirement of a truly adaptive control. In this domain the (XPRESProject, 2010-) is investigating the aspect related to self-organization
and self-learning within EPS. A wider connotation of the autonomy
issue with respect to the related business implications and impact is
provided in §3.3 Towards plug to order in order to serve as an
assumption for the eventual development proposed in this
dissertation.
23
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
As (Goldhar and Jelinek, 1985) noticed the first stage in the
development of automation, the so called Dedicated Automation
(hence DA) enabled the possibilities of the so called economies of scale
– the ability to produce a large volume of one or a few products
efficiently- whereas the second stage, also known as Flexible
Automation (hence FA) enlarged the consequent impact allowing
economies of scope –the capacity to efficiently and quickly produce
any of a range of parts or products within a family. The possibility of
reprogramming the machines and the computer-powered
integration of tools for the design and management of the company
has provided an effective and quick way of managing the product
variants. In different ways both these approaches to automation had
the product as a main driver for their development. The
advancements in manufacturing technique discussed in the previous
sections shift the focus from the product to the processes.
As seen above, in the EPS paradigm, processes are composed of
basic operations that can be accomplished with a well-defined set of
skills. In the EPS domain skill is also the basic concept to describe
the capability of a piece of hardware, and therefore it becomes the
natural link between processes and actual production system. One
can say that evolvable production systems are built to provide a
large set of generic skills able to take part in a large amount of
processes. Therefore, in that sense, it is possible to conclude that EPS
promotes Economies of Skills – i.e. the capacity to efficiently and
quickly deliver any skill or combination of skills to fit the
requirement of the production.
24
Chapter 2. Literature Search and Analysis
The following Table 1 summarizes the most important principles
of the main approaches to automation discussed throughout this
section.
Dedicated
Automation
Flexible
Automation
Evolvable
Automation
 Dedicated
transfer line
 Machine tool
 Dedicated
assembly station
for simple
operation with
fixed DoF
(place/fasten/
confirm)
 Manual design
Integral:
 Basic include inline and rotary
 Programmable
transfer line and
vehicles
 DCN Machine
 Robot
 Computer Aided
Design/Computer
Aided
Manufacturing
 Autonomous
transfer line and
vehicle
 3D printer
 Plug and Produce
Machines
 Concurrent
engineering
Integral:
 Multiple task with
or without tool
changes
 Built in
Redundancy
Modular:
 Open and
scalable.
 Autonomous
modules with
embedded
intelligence
Control Logic
Centralized:
 Execution of
predetermined
sequences
 Robust
Centralized:
 Motion
modulated by
sensing and
decision
 Robust with
variable
parameters
Distributed:
 Self-configuration
 Self-Organization
and self-learning
 Adaptive
Driver of the
development
Product
Product Family
Process and
Hardware through
the concept of Skills
Target
Volumes:
Economies of Scale
Variants:
Economies of Scope
Processes:
Economies of Skill
Embodiment :




Logistic
Manufacturing
Assembly
Product Design
in relation to
manufacturing
System
Architecture
Table 1 Comparison among DAS, FAS and EPS
25
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Together with opportunities, innovation always carries a whole
new set of demands and threats on the organizations adopting them.
Sophisticated automation, along with IT tools, needed specific
competencies that force the company to both enlarge their internal
qualification and cooperate with new external entities that can
provide the necessary expertise. (Bi et al., 2008) noticed that the issue
of how companies can shift from a traditional approach to
automation to an innovative one is nearly untouched. This work is
thus aimed at building a rational way of characterizing and
implementing through suitable business models the technological
advancements that can support this purpose. The following sections
of this literature review bring into view the necessary constructs to
fulfill this endeavour.
(Schumpeter, 1934), and many others ever since, have regarded
innovation as a main driver of the economic development. This
process can be embodied in small cumulative steps, also known as
continuous improvements, or in a more abrupt momentous shift in
the technology. This latter case is also referred to as discontinuous
innovation and it can affect, according to (Hamilton and Singh, 1992),
both the product and the processes of a company. While the
established firms are usually good at dealing with continuous
improvements they often fail in the face of a radically new
technology, which historically remain the prerogative of new
upcoming firms.
An interesting approach to explain the reason behind this
“incumbent’s curse” as (Foster, 1986) has called it, comes from the
observation of (Burns and Stalker, 1961) that firms grow efficiently
26
Chapter 2. Literature Search and Analysis
within a specific technological paradigm. On this line of thought,
(Prahalad and Bettis, 1986) introduced the concept of dominant logic:
the manager of an organization makes decisions according to a wellestablished pattern shaped by their experience. This dominant logic
is in practice a set of heuristic rules, norms and beliefs that guide a
firm’s “intelligent” choices. While this collection of cognitive bias is
underpinning the internal focus and coordination of a company it
also acts as a filter for potentially good opportunities coming from
the external environment. In this framework it is possible to say that
managers will rationally only accept technological innovations that
match positively their dominant logic: in order to overcome this
predicament (Argyris, 1977) suggested an approach to learning
based on a double-loop: firm should not only focus on identifying
errors and solving problem but also periodically revise and update
their values and assumptions.
(Tushman and Anderson, 1986) have looked at the firm’s
resources and capability: they have classified the innovations in
competence-enhancing and competence destroying. These authors argue
that technological shifts which destroy a company’s existing skills
are difficult to manage because they are not in line with traditions,
sunk costs and internal political constraints. (Henderson and Clark,
1990) elaborated an interesting theory introducing the concept of
architectural shift and modular shift. They noticed that incumbent
firms are able to handle modular innovations while they often fail to
recognize and respond to architectural innovations.
All these works have tried to explain this incumbent curse by
looking at the internal side of the firm. Many authors have pointed
out the importance of broadening the spectrum of the analysis
beyond the boundaries of the focal firm. (Afuah and Bahram, 1995)
argue that a focal firm might encounter problems also if the
innovation is competence-destroying and architectural for its key
suppliers and customers. On a different line of reasoning (Utterback,
1996) deems the competence destroying effect of innovation as
27
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
minimal in comparison with its impact on the market. This author
argues that the bigger the effect of the innovation on the market (size
and related linking mechanisms with the firm), the harder it is to
manage the discontinuity.
The next paragraph introduces the work of an author that has
studied the effect of innovation on the disk drive market. His
findings were not in line with the proposed theories therefore he
introduced the concept of disruptive innovation.
The concept of disruptive innovation appeared first, with the name
of disruptive technology9, in (Bower and Christensen, 1995) but it was,
in fact, introduced mainly by the latter that eventually published the
famous (Christensen, 1997) in which he expanded the scope of such
a concept by discussing the related implications to their full extent.
The question underlying Christensen’s work was: why do large
and apparently well managed companies sometimes fail because of mistakes
in judging the potential of innovation? The key concept to answer this
question lies in Christiansen analysis’ perspective: unlike previous
scholars he looked at the influence of the external environment on
the behaviour of an organization rather than on its internal
organization. In particular he introduced this classification of the
innovation based on its impact on the existing market:

Sustaining Innovations: they give to customers
something more or better in terms of the attributes they
already value. Therefore they contribute in maintaining
the market as it is through a constant rate of
improvement. They can be evolutionary if they improve
In this work disruptive technology is sometimes used as synonym of
disruptive innovation
9
28
Chapter 2. Literature Search and Analysis

the product in ways the customers are expecting or
revolutionary if unexpected.
Disruptive Innovations: they offer a new package of
attributes to the customer of a given market, often
performing far worse in the attributes the customers
already value. For this reason they are introduced and
developed in different markets but once fully established
can be a threat for the initially mentioned previously
existing one.
Therefore companies that are very close to the current market
demands will always pursue sustaining innovation because they
inherently satisfy their present customer’s needs.
Some later works, (Christensen and Overdorf, 2000) and
(Christensen and Raynor, 2003), have argued that “disruptiveness”
is not an inherent feature of the technology. Advancements that
result as disruptive for a firm might be sustaining for another: it all
depends on the underlying business model. For this reason the
name of the concept has been updated from disruptive technology
to disruptive innovation. The broader implication of this
consideration is that a company should adopt business models able
to foster both awareness about potential disruptive innovations and
strategy to exploit them. According to (Afuah, 2000) this is not a
process that can be handled by a single organization: it is necessary
to broaden the perspective beyond resources of the examined firm to
the network of customers, suppliers and alliance partners. This last
consideration is all the more true when the object of the analysis is
not the product produced by the focal firm, but an automatic
assembly system that has several different stakeholders (see §2.4
State of the art).
29
Performance
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Trajectory of performance
improvement for
sustaining innovation
tion
duc ion
o
r
t
vat
e in
f th e inno
o
t
c
iv
Effe isrupt
d
f
o
Gap
ance
Perform e high
y
d b th
require e market
h
end of t
ance
Perform e low
d by th
require e market
h
end of t
Trajectory of performance
improvement for
disruptive innovation
Time
Figure 4 Performance in time of disruptive and sustaining innovation in respect
with the mainstream market
Figure 4 is a classical Christiansen’s chart that puts in evidence
some of the features of disruptive innovation and sustaining
innovation with reference to the high and low ends of the
mainstream market. In particular the overall performance of the
technology in meeting the customer requirement is here plotted
along the time dimension. The two green dashed lines represent the
trend of performance improvement expected by the high and the
low ends of the market. Customers usually expect a trend of
performance improvement similar to the one experienced so far.
Therefore sustaining technologies usually keep the expected trend
or redefine it by offering something more: this latter is the scenario
represented by the brown line in the graph. It is important to notice
how sustaining innovation is aptly conceived for the specific market
so it always fulfills at least the expectation of the low end of it.
30
Chapter 2. Literature Search and Analysis
Disruptive innovations on the other hand are usually developed
within other different, sometimes newly created, markets. Therefore
initially they often don’t fit at all with the mainstream market in
exam. This is represented in figure 2 by the red gap between the
initial disruptive technology performance and the expectation even
of the less demanding segment of the low end market: this is the
main barrier to its introduction on the market. Nevertheless, once
the development starts to target the reference market, solutions in
line with the desires of the customers begin to appear. The mere
introduction of a disruptive technology on the market might
therefore have a lethal effect on the sustaining technologies already
present: the higher performance/time ratio is in fact assimilated by
the customer and it becomes the default one. In other words the
disruptive innovation brings the customers on a higher level of
demand that previous technologies cannot match and, consequently,
the value of sustaining technologies for the customers just falls. As
(Charitou and Markides, 2003) noticed, in this case, the value of all
the investments in previous technologies made by the incumbents is
destroyed.
In Christensen’s work the disruptive innovation moves to the
mainstream market through a newly established market channel
following the logic of “attack from below”. (Utterback and Acee,
2005), instead, see disruptive innovation as a powerful tool to
broaden the current market by providing new functionalities: in his
model disruptive technologies are “introduced in the most
demanding established market segment and later move toward the
mass market”. This observation leads to a more general definition of
disruptive innovation provided by (Danneels, 2004):
A disruptive technology10 is a technology that changes the bases of
competition by changing the metrics along which firms compete.
10
Editor’s Note: the same as disruptive innovation
31
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Earlier works such as (Semere et al., 2008) (Maffei and Onori,
2009) have shown the disruptiveness of the EPS paradigm if
compared with the current practice, in several different aspects
related with the development and eventual exploitation of an
automatic assembly system. While the EPS paradigm’s cornerstones,
such as Modular architecture or Multi-Agent technology are well
established in many other domains, their combination carries a high
disruptive potential for the automation process in industry. Such
potential still needs to be fully developed. While introducing a series
of promising possibilities, such as instant deployment, not yet fully
valued by the market, the EPS paradigm is still not technically
mature enough to compete with traditional automation in the
current competitive environment. This is not a trivial problem:
automatic assembly systems are very complex products that involve
several stakeholders beyond the focal firm. Therefore, in order to
enable the expensive technical improvements needed to bring the
EPS paradigm up at mass manufacturing industrial standard, a
deeper understanding of all the required business models able to
exploit at full its potential is a key success factor. This leads to the
next section of this literature review, aimed at presenting the
recently formalized concept of business model.
The previous sections pointed out the necessity of further studies
focused on the introduction of the newly established production
paradigm in industry. This is mainly due to the difficulties of fitting
these highly disruptive advancements into existing and wellestablished manufacturing strategies. The technical disruptiveness
of such technology has been widely explored and therefore is not
32
Chapter 2. Literature Search and Analysis
regarded as a problematic issue, whereas the strategic
disruptiveness is still not formalized enough. In other words there is
a need for references and eventually tools that allow the
organizations to devise informed business strategies aligned with a
specific manufacturing strategy that fosters the use of such
technologies.
The relationship between the business strategy and
manufacturing strategy of a company has been widely investigated
by scholars. The main research issue is two-fold: first providing
structure and tools for a consistent and effective alignment of the
manufacturing & business strategy, and then investigating if the fit
between them can provide competitive advantages to a firm. A
fundamental concept introduced by the scholar for enabling
effective research in the field is the production competence. (Cleveland
et al., 1989) have firstly defined the production competence as a
multi variable function of the fit between business strategy contents
and manufacturing strategy contents, and they have eventually
investigated the effect of such a construct on the overall business
performance of the firm. The study provided empirical evidence
supporting a significant relationship between production
competence and business performance. Following studies have
criticized and modified the model accordingly: (Vickery et al., 1993)
have re-defined production competence as a degree to which
manufacturing performance supports a firm business strategy and
their findings suggest that some business strategies are affected
more than others by the performance attained in manufacturing.
(Choe and Hu, 1997) noticed how the decisions that implement a
manufacturing strategy are structural as they affect a relatively long
period that spans from one to several projects. Thus they once again
re-defined the production competence as the fit between business
strategy and manufacturing structure. Their results point out an
evident influence of the business strategy on manufacturing
structural decisions: in particular a proper alignment of
33
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
manufacturing structure with business strategy has been proved as
an utmost driver of the business performance. Besides the
mentioned and obvious outcomes of these works, they also highlight
the multifaceted nature of the mutual influence between the
business and the manufacturing strategies and performances of a
company.
The alignments between the strategic objectives of a firm and its
manufacturing resources have been studied mostly from the product
or organization point of view. Starting from the observation that
advanced manufacturing technologies are double-edged swords
because, together with the competitive benefits, they also impose
heavy organizational challenges. (Zammuto and O'Connor, 1992)
have pointed out the necessity of an alignment between the
adoption of such technologies and the organization design and
culture, whereas (Nemetz and Fry, 1988) envisage and describe the
feature of a flexible manufacturing organization able to take
advantage of a technological shift towards flexibility. Product design
is another broadly explored area of analysis: along with the famous
(Boothroyd, 1994)’s design for assembly and manufacturing, many
authors such as (Gershenson and Prasad, 1997) have focused on how
a modular design can fit manufacturing requirements. (Porter, 1985)
and many other authors after him have on several levels advocated
the central role played by a successful design of the value chain
where the manufacturing technology is a necessary activity to enact
the strategy of the company.
It is important at this point to introduce the perspective from
which the problem has been approached in this work. Automatic
Assembly Systems are very sophisticated products: their
development, design and handling are complex processes involving
a variable number of cooperating stakeholders that stretch far
beyond the boundaries of the organization itself. The set of skills
necessary to “produce” and run an automatic assembly system are
in fact to be found in different disciplines: marketing, automation,
34
Chapter 2. Literature Search and Analysis
processes and product analysis. Thus, multiple stakeholders are
involved in a cooperative framework in which all the different core
competencies must come together and all the singular interests
fulfilled. The logical consequence is that the analysis and the correct
definition of the problem need to be carried out with a holistic and
systemic approach: the concept of business model encompasses a
resource-based point of view with the industrial organization
structure as well as product and external factors. It becomes
therefore fundamental in connecting these considerations with the
requirements individuated to handle the disruptiveness of the EPS
paradigm.
The concept of business model has been well-known in trading
and economic behavior since pre-classical time. However, as (Teece,
2010) stresses, the study of such constructs is a relatively recently
established research domain. The first relevant contributions in this
field in fact date back to the late 90’s when, according to authors like
(Amit and Zott, 2001), the fast development of cheap and reliable
information and communication technology were seriously
questioning the traditional business paradigm. Many analysts, such
as (Merrifield, 2000), both in industry and academia arrived to the
point of deeming the current economic theories and laws close to
extinction. The hype for the new economy was, in fact, at its peak
and it was giving impulse to a large amount of new on-line related
ventures: companies were offered new opportunity, but endangered
by new threats. The usual tools of strategic analysis did not yield
good results able to steer a full exploitation of the new ICT. A more
holistic and systemic perspective was in high demand: therefore the
increasing interest in the concept of business model. When
eventually, at the beginning of the year 2000, the dotcom bubble
burst the visibility of the concept began to decline but, given its
35
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
potential, the interest for business models remained in the scholars
that started producing more and more sophisticated contributions to
the field. In the next figure 5 the NASDAQ index between 1998 and
2003 is compared with a generic Gartner’s Hype Cycle as described
by (Linden and Fenn, 2003).
Jun-03
Dec-03
Dec-02
Jun-02
Jun-01
Dec-01
Jun-00
Time
Dec-00
Trough of
disillusionment
5000
4000
3000
2000
1000
0
Jun-99
Visibility
Plateau of
productivity
Dec-98
Peak of inflated
expectation
Dec-99
NASDAQ Index
Gartner’s Hype Cycle
Figure 5 Gartner’s Hype Cycle compared with the NASDAQ Index between 1998
and 2003
The concept of business model has always accompanied the
manufacturing and trading activities as an abstract construct able to
characterize different affairs. Nevertheless, still nowadays, it is
surprisingly not fully conceptualized in a well-accepted and
established form within literature. (Teece, 2010), among the others,
noticed that the concept has not yet established theoretical
grounding in economic or in business studies: in other words there
is no agreement on what a business model is and on how it can be
proficiently used by managers. As a matter of fact, few other
domains have yielded such a vast and heterogeneous body of
knowledge like the business model one. The first hint on the variety
of the contributions can be inferred by the number of different
interpretations of the construct as summarized in Table 2.
36
Chapter 2. Literature Search and Analysis
Business model is a…
… statement
Authors
(Stewart and Zhao, 2000)
… description
(Applegate and Collura, 2000)
(Weill and Vitale, 2001)
… representation
(Morris et al., 2005)
(Shafer et al., 2005)
… architecture
(Timmers, 1998)
(Dubosson‐Torbay et al., 2002)
… conceptual tool or
model
(George and Bock, 2011)
(Osterwalder, 2004)
(Osterwalder et al., 2005)
… structural template
… method
… framework
… pattern
… set
(Amit and Zott, 2001)
(Afuah and Tucci, 2000)
(Afuah, 2004)
(Brousseau and Penard, 2007)
(Seelos and Mair, 2007)
Table 2 Different understanding of the concept of Business Model (adapted
from (Zott et al., 2010))
This variety is not an anomaly: definitional and conceptual
disagreement is a normally observed phenomenon at the dawn of
any new potentially important idea of wide usefulness. In general
this area of study is deemed very promising as it yielded very sound
constructs and relationships able to model past and present of a
business, providing also good support for prediction about the
evolution of it in a given scenario (as detailed later).
37
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
This paragraph will first briefly introduce the different uses of
business model in literature in order to individuate the ones
applicable to this work. In the following section the selected
literature is explored and presented in detail with the purpose of
narrowing down the contributions relevant for this dissertation.
Finally a set of derived sub-constructs, or elements, of a business
model will be characterized in order to be used as basis for the
original contributions presented in Chapter 4 and Chapter 5.
Many studies have attempted summarizing all the research
efforts aimed at theory building and testing in the business model
domain: all of them have encountered difficulties in identifying a
clear mainstream thread. Such configurations hardly allow
cumulative research and consequent consistent improvements they
have nevertheless been able to disclose some interesting patterns
through several authors. (Zott et al., 2010) have found out, in their
extensive review, that the research community has been targeting
three main promising areas for the application of the concept:
1. E-business and the use of information technology in the
organization
2. Strategic issues such as value creation, competitive
advantages and firm performances
3. Innovation and technology management
Despite many conceptual differences in the founding constructs
among these three research silos, and within each silo, the following
themes emerged quite clearly from their literature analysis:
I.
38
There is widespread acknowledgment, implicit and
explicit, that the business model is a new unit of analysis
that is distinct from the product, firm, industry, or
Chapter 2. Literature Search and Analysis
II.
III.
IV.
network; it is centered on a focal firm but its boundaries
are wider that those of the firm.
Business models emphasize a system-level, holistic
approach to explaining how firms “do business”.
The activities of a focal firm and its partners play an
important role in the various conceptualizations of
business models that have been proposed.
Business models seek to explain both value creation and
value capture.
Activity
List business
Define & classify
model
business models
components
Outcome
(Osterwalder et al., 2005) noticed how the concept of business
model has been evolving since it became a hot research topic. Even
though authors have not constructed the work upon each other, and
therefore the development has been asynchronous and often even
diverging, he observed a certain progression. Figure 6 shows the five
phases identified in the maturation of the literature.
Definition &
taxonomies
Describe
Model
Apply business
business model business model
model concept
elements
elements
‘shopping list’ of Components as Reference models Applications &
components
building blocks & ontologies
conceptual tools
Figure 6 Evolution of the business model concept (adapted from
(Osterwalder et al., 2005))
Another important contribution introduced by Osterwalder’s
survey is the categorization of the authors in the following three
clusters:
1. Authors that describe the business model as an abstract
overarching concept that can describe all real world
businesses
39
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
2. Authors that describe a number of different abstract
types of business models (i.e. classification scheme), each
one describing a set of businesses with common
characteristics.
3. Authors presenting aspects of, or a conceptualization of,
a particular real world business model.
Each category has basically followed a path of evolution similar
to the one described in Figure 6, therefore they all encompass
contributions with different modeling rigor, ranging from simple
definition to holistic ontological representation. (Osterwalder et al.,
2005) deemed all the three clusters worth studying and they suggest
a hierarchical comprehensive approach. Figure 7 displays the logical
link among clusters along with the range of the underlying research
questions.
40
Business
Model
Type
Business
Model
Of Dell
Dell
Business
Model
Type
Business
Model
Of Amazon
Amazon
Business
Model
eBay
eBay
Instance level
Business
Model
Concept
Conceptual level
Chapter 2. Literature Search and Analysis
DEFINITION
What is a business
model?
META-MODEL
What elements belong
into a business model?
TAXONOMY OF TYPES
Which business models
resemble each other?
SUB-(META)-MODEL
What are the common
characteristics?
INSTANCES (VIEW OF
COMPANY)
MODELLED INSTANCE
REAL WORLD
COMPANY
Figure 7 Business model concept hierarchy (adapted from (Osterwalder et al.,
2005) )
Keeping in mind the overall objective of studying the business
models associated with an evolvable production system, this broad
and multi-perspective overview now allows the extracting of some
operative indications on how to proceed on this literature analysis.
The EPS paradigm is, first of all, a technological innovation, so
particular attention must be paid to the role of business models in
this domain. Secondly, EPS are still not applied at industrial level, so
the study is to be performed at conceptual level. This does not mean
that, for instance, studies focused on e-business or on particular real
world company must be overlooked: it simply enlightens the
requirement to adapt the related constructs and methods to the
constraints of this specific work.
41
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The business model can be both the subject of innovation and a
vehicle for innovation: (Calia et al., 2007) pointed out the two-way
relationship between technology and business model. On the one
hand technological innovation can trigger changes in the company’s
operational and commercial activities, and hence in the business
model. On the other hand the business model can call for the
development or simple adoption of specific technologies.
(Chesbrough and Rosenbloom, 2002) have explored the role of
business model in capturing value from early stage technologies.
When a technology blossoms from research activity it holds a certain
potential value that only becomes real through an aptly designed
process of value creation and capturing. Business model is therefore
defined by these authors as the heuristic logic that connects technical
potential with the realization of economic value and it has the following
functions, visually summarized in Figure 8:





42
Articulate the value proposition, i.e. the value created for
users by the new technology.
Identify a market segment, i.e. the users to whom the
technology is useful and for what purpose, and specify
the revenue generation mechanism(s) for the firm.
Define the structure of the value chain within the firm
required to create and distribute the offering, and
determine the complementary assets needed to support
the firm position in this chain.
Estimate the cost structure and profit potential of
producing the offering, given the value proposition and
value chain structure chosen.
Describe the position of the firm within the value
network linking suppliers and customers, including
Chapter 2. Literature Search and Analysis

identification
of
potential
complementors
and
competitors.
Formulate the competitive strategy by which the
innovating firm will gain and hold advantage over rivals
Technical
Inputs:
e.g.,
feasibility,
performance
Business Model:
- market
- value proposition
- value chain
- cost an profit
- value network
- competitive
strategy
Measured in technical domain
Economic
Outputs:
e.g.,
value, price,
profit
Measured in economic domain
Figure 8 The business model mediates between the technical and economic
domains (adapted from (Chesbrough and Rosenbloom, 2002))
While this list of functions provides a comprehensive set of
target areas for this dissertation it still needs to be filtered through
the lens of the level of technology development. As shown in Figure
9, in fact, technologies do not shift from pure science directly to the
market. Such transaction is achieved through a stepwise process of
increasingly refined applied research spanning from basic technology
research (e.g., how does one obtain a laser beam from Einstein’s idea
of stimulated emission?) to system test, launch and operation (e.g. How
do I certify the quality of a machine that exploits a laser beam to
remove tattoos?) through all the intermediate stages. The naming
convention used hereby for the stages of applied research is due to
(NASA) and reported in (Mankins, 1995).
43
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Technology
Re
se
ar
ch
Challenges
lie
d
Needs
Pure Science
Ap
p
Technology
Demonstration
Principles
Technology
Development
Basic
Research
System Test,
Launch &
Operation
System/
Subsystem
Development
Research to
Prove
Feasibility
Basic
Technology
Research
lS
cia
n
a
Fin
p
up
t
or
Level of
specification of
the technology
application and of
the consequent
Business Model
Time
Figure 9 Pure Science vs. Technology: basic research and condition for
progress in applied research
The outstanding consequence of adding this new dimension to
the problem is an increase of the uncertainty. Therefore the process
of formulating a business model able to create and capture value
from a given innovative technology must be carried out in an
iterative fashion: the more the technology is close to the market, the
more sophisticatedly the business model needs to be defined. As a
matter of fact, the influence between technological maturity and
business specification is mutual: as (Nelson, 1959) found out in his
renowned work on the economics of basic scientific research “A
profit maximizing firm will undertake a research project to solve problems
related to a development effort if the expected gains […] exceed expected
research costs…”. Nelson already pointed out in this inspired analysis
another condition to enable the investment in research effort: the
value of the resulting innovation must be fully captured from its
potential market. As (Rosenbloom and Spencer, 1996) remarked, a
44
Chapter 2. Literature Search and Analysis
systematic failure in capturing the full potential value generated by
their research efforts might even push organization to give up R&D
in the first place. The basic research is not a process blind to the
needs of both technology and market. Although, in fact, many
important discoveries have occurred historically while a researcher
was looking for something else, technological challenges as means to
target specific customer needs are the utmost sources of inspiration
and measures of success for pure science.
The lack of EPS’s industrial applications allows only dealing
with a subset of the functions of a business model identified above:
while, in fact, the generic value proposition of a technology can be,
in some cases, identified at least partially even in the early stages of
the related applied research, some aspects, like target customers or
profit potential can only be significantly established when the
process has reached the last echelons. For the purpose of this
dissertation it is therefore important to establish the current level of
technological achievement of the EPS paradigm. In view of the
pertinent literature presented above and according to (Maffei et al.,
2010) the EPS paradigm can be placed in the middle-term applied
research: in detail, with reference to Figure 9, it lies after the
Technology Demonstration step (reported in (Onori et al., 2012)), in the
earlier phase of System Development. The formalization of the
relevant business model elements is envisaged, at this stage, as a
necessary step towards better specified applications and consequent
further technological developments.
This paragraph introduces a conceptual business model definition as
derived from the reviewed literature. Such a definition is based on
three elements: Value Proposition, Value Configuration and
Architecture of the Revenue. The relationship among such elements
45
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
through the concept of value is summarized in the following Table
3.
Element
Relationship with the concept of value
Value Proposition
Defining the Value
Value Configuration
Creating the Value
Architecture of the Revenue
Capturing the Value
Table 3 Relationship among the business model’s elements through the
concept of value
With respect to this dissertation, the characterizing aspect of
such elements is their relationship with the stakeholders which
embody the particular business model. While the value proposition
is an external factor in this respect, vice-versa the profiting
organizations have a direct influence on the chosen value
configuration and architecture of the revenue. These two latter
constructs can be therefore considered internal with respect to the
related firms. By accepting the implicit validity of such a generally
accepted three-element definition, this work uses a more
stakeholder-oriented definition of business model as a
combination of the two internal elements as seen above. The
definition of the value, embodied in the characterization of the
value proposition (see Chapter 4) is therefore considered as an
external input to the actual business model. The complete and
detailed business model working definition is introduced in the
initial part of Chapter 5.
The main functions of a business model identified by
(Chesbrough and Rosenbloom, 2002) and presented in the previous
sections have been widely investigated both explicitly and implicitly
in the pertinent literature. Most of the scholars that have engaged in
46
Chapter 2. Literature Search and Analysis
the business model domain have identified in the value proposition
its utmost generative construct. Every business venture based on a
new technology begins, in fact, when the value that a potential
customer can obtain by using such innovation is explicitly
understood. Value is a purely economic metric, not always
allocatable on the performance of physical attributes. In addition a
value proposition must be studied from different perspectives:
different stakeholders might be interested in distinctive, maybe
latent, features of the technology. Complex products made of
heterogeneous components, e.g. Production Systems featuring
hardware, software and supporting services, have a very broad and
multifaceted value proposition. In order to capture this complexity
(Osterwalder, 2004) defined the value proposition as a set of
elementary offerings.
The most important aspects and implications of this construct
are as follows:


An offering captures a specific fraction of the overall value
proposition. Therefore the sum of all the single offerings
coincides with the value proposition.
The offerings occur in different moments during the lifecycle of
a value proposition. (Osterwalder, 2004) has individuated
five stages:
o Value creation: the design and realization of the
focal product. The more a product is customized
the higher the value.
o Value purchase: the transition between the
producer and the user, the acquisition. Ease of
finding the right product, fast delivery time and
reliability of what is delivered are the main value
enhancers in this phase.
o Value Use: the use of the focal product is the most
traditional phase of its value life. The value is
47
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology

48
maximized when the value proposition attributes
match the current needs of the customer.
o Value renewal: a requalification of a product for
prolonging the use might be possible or needed.
This is the case when a product is used up (e.g.
empty phone card), expires (e.g. end of magazine
subscription), becomes obsolete (e.g. outdated
machinery) or is dysfunctional (e.g. need for a car
service). A value renewal can be also gradual as in
some software products. In general it is possible
to say that the renewal process is more valuable
when: (1) it fits the customer by increasing
requirement over the time; (2) it happens in a
non-invasive way; (3) it yields a renovated
product that is equal to a new one with the same
purposes.
o Value transfer: at the end of its useful lifecycle a
product must be effectively retired. A product
might have lost value for a customer but still
holds some value for another customer (e.g. used
book). In other cases it can be a burden of which
the disposal can even require costs (e.g. old
refrigerators, batteries). High end of life value and
ease of disposal make therefore products more
valuable
The formalization of distinctive offerings allows a better
alignment between the process of creating and capturing a
value proposition and the required business models. A new
business model can target: a single offering, a particular
set of offerings or even a fraction of an offering In any
case aptly designed strategies and related core
competencies are needed in order to effectively capture
the associated value.
Chapter 2. Literature Search and Analysis
Once the value proposition has been defined such a value must
be created. The nature of the value proposition requires the
interested organization to play a certain role in order to profit from
it. In this respect, from a purely conceptual point of view, companies
can be classified in different ways: reseller, system integrator, host,
service provider, product manufacturer etc… Such categories are
very generic and can be found with other names in quite a number
of authors. These taxonomies are not really relevant in this work
thus, for their descriptions, the reader can refer to basic literature.
The aim of this dissertation is, in fact, disclosing the feature of the
business model for a disruptive system such as EPS rather than
frame it in a set of pre-defined clusters.
In view of this, one can say that firms must perform some
specific activities to exploit a given value offering. The description of
the arrangement of one or more activities in order to provide such value
proposition is, as defined by (Osterwalder, 2004) the value
configuration. The author classified the construct in three main
clusters visually summarized and logically described in Table 4:
1. Value chain. Defined by (Porter, 2001), it contains all the
activities aimed at delivering high volumes or
differentiated products. In this scheme companies create
value transforming inputs in more refined outputs.
2. Value shop. This configuration is characteristic of service
provisioning. A service provider solves problems of the
customer rather than fixing on one solution and
reproducing it like in the value chain. The focus here is
on discovering the customer needs, finding solutions to
deliver value, verify the fulfillment and re-iterate the
process if necessary.
49
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
3. Value network. This configuration provides value to the
customer through networking service: for example for
firms that wish to be interdependent.
Value
configuration
Value chain
Creation
Logic
Interactivity
Relationship
Logic
Transformation
of inputs into
output
Sequential
Solving
customer
problems
Cyclic
Linking
customers
Mediating
Value Shop
Value Network
Table 4 Value configuration: creation logic, interactivity relationship logic
(adapted from (Osterwalder, 2004))
Table 4 shows, for each class of value configuration, both the
creation logic and the interactivity relationship logic. While the former
describes synthetically the rationale behind the creation of the value
the latter exemplifies the activities layout. Each value configuration
has a typical set of activities. In detail, according with (Osterwalder,
2004):

50
Value Chain:
o Inbound logistics. Activities associated with
receiving, storing, and disseminating inputs to the
product.
Chapter 2. Literature Search and Analysis
Operations.
Activities
associated
with
transforming input into the final product form.
o Outbound logistics. Activities associated with
collecting, storing and physically distributing the
product to buyers.
o Marketing and sales. Activities associated with
providing a means by which buyers can purchase
the product and inducing them to do so.
o Service. Activities associated with providing
service to enhance or maintain the value of the
product.
Value Shop:
o Problem finding and acquisition. Activities
associated with the recording, reviewing, and
formulating of the problem to be solved and
choosing the overall approach to solving the
problem.
o Problem solving. Activities associated with
generating and evaluating alternative solutions.
o Choice. Activities associated with choosing
among alternative problem solutions.
o Execution.
Activities
associated
with
communicating, organizing, and implementing
the chosen solutions.
o Control and Evaluation. Activities associated with
measuring and evaluating to what extent
implementation has solved the initial problem
statement.
Value Network:
o Network promotion and contact management. It
consists of activities associated with inviting
potential customers to join the network, selection
of customers that are allowed to join and the
initialization, management, and termination of
o


51
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
o
o
contracts governing service provisioning and
charging.
Service provisioning. It consists of activities
associated with establishing, maintaining, and
terminating links between customers and billing
for value received. The links can be synchronous
as in telephone service or asynchronous as in
electronic mail service or banking. Billing requires
measuring customers’ use of network capacity
both in volume and time.
Network infrastructure operation. It consists of
activities associated with maintaining and
running
a
physical
and
information
infrastructure. The activities keep the network in
an alert status, ready to service customer requests.
Each activity will consume/require and/or produce/serve
resources according to a scheme illustrated in Figure 10.
Resource
Activity
Activity
Resource
Activity
Resource
Resource
Activity
fit
flow
shared
Resource
Activity
Resource
Activity
Resource
Activity
Resource
Activity
Figure 10 Relationship between Activities and resources (adapted from
(Osterwalder, 2004))
Three are the possible relationships:

52
Fit: when two or more resources serve an activity, or vice
versa.
Chapter 2. Literature Search and Analysis


Flow: when an activity requires one resource, or vice
versa.
Shared: when a resource serves two or more activities, or
vice versa.
Finally, it is possible to classify the resources in four
typologies:




Physical: they include durable items such as
buildings, computers, machine tools or robot, and
nondurable like food, clothing or paper.
Intangible: they include legally protected intellectual
property but also knowledge, goodwill and brand
image.
Financial: mainly cash but also stocks, bond,
insurances or owning rights on future cash flows.
Human: they include human time and effort.
Once the value proposition of a technology is clear the logical
next step is identifying the market segment to target and defining the
related revenue generation mechanisms. The object of this analysis is a
still broadly defined new concept of production system: the current
embodiment of the technology is not related to any particular
industry or specific application. Therefore at this stage of the
technology development the general market segment is not a
fundamental element of a business model. In other words, the
overall value proposition of an EPS can be referred to the general
automation market (see Figure 11).
53
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Value Proposition
Offering
Offering
Offering
Offering
Offering
Offering
Offering
Automation Market
Offering
Evolvable Production System
Figure 11 Market segment for EPS technology: external and internal
The concept of market segment is, instead, very important for
this dissertation if referred to the internal exchanges between the
different offerings. Figure 11 shows the two-fold dimension of the
issue: the atomic offerings related to an EPS are not independent.
Thus, the consequent business models will be strictly related. These
internal transactions must be therefore described in detail and the
related interaction mechanisms identified.
For this purpose it is now useful to introduce the concept of
Architecture of the Revenue: this construct encompasses, as shown in
Figure 12 the economic activity that generates the value stream and
the related pricing mechanism and the returning flow of money.
54
Chapter 2. Literature Search and Analysis
Money
Interfacing Economic Activity
User
Supplier
Architecture of the
Revenue
Pricing Method
Figure 12 Architecture of the Revenue
Figure 12 presents also the formal notation used in this
dissertation for such a newly introduced construct. The graphical
symbol is composed of three arrows which are deployed among two
stakeholders engaged in a classical business relationship UserSupplier. In detail the representation is composed of:


One green arrow with direction from the User to the
Supplier: it represents the flow of money (or differently
defined benefits for the Supplier) in exchange for the
supply.
Two yellow arrows with direction from the Supplier to
the User: they represent, as seen above, the interfacing
economic activity among the involved players and the
related pricing mechanism. The direction of these arrows
does not necessarily mean that the decisions related to
the represented constructs are to be taken by the Supplier
alone. Often they in fact result from the particular
balance of power and needs in the specific scenario.
For the definition of the economic activities related with
revenue generation it is possible to refer to (Osterwalder, 2004)’s
classification:
55
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology





Selling. The activity of giving away ownership on a good
in exchange of money. The ownership can be full or
partial. A company can, for example, sell a music CD and
retain the intellectual properties for the content. In any
case, when a product is sold it cannot generate any more
value for the seller.
Lending. The activity of giving something to someone for
a period of time, expecting it to be given back. A
company can generate an income for this activity. The
feature that makes lending different from licensing is that
the object given away cannot be used while being lent. So
it does produce income when it is given away and not
during the period it is away.
Licensing. The activity of giving permission to someone
to do something or use something in exchange for a
licensing fee. Licensing can theoretically generate
unlimited income, except in the case of exclusive
licensing. Copyright holders (patents, software) and
franchises exploit this mechanism to generate income
without having to produce goods or services.
Transaction Cut. The fee paid to a third party that has
facilitated or performed a deal between two or several
organizations is called transaction cut or commission.
Advertising. The activity of telling about or praising
something publicly in exchange for money.
A fundamental attribute of the supplier-customer relationship
is the pricing method. The way a company establishes the price of
the goods or services supplied might be critical for its success.
(Osterwalder, 2004) has introduced a comprehensive taxonomy for
the pricing methods. The classification is based on three superclasses, each one with related sub-mechanisms, in detail:
56
Chapter 2. Literature Search and Analysis
1. Fixed Pricing. These mechanisms produce prices that are
independent from customer characteristic, volumes or
real time market condition. The main types are:
a. Pay-per-use: the customer pays in function of the
time of quantity he/she consumes of a specific
product.
b. Subscription: the customer pays a flat fee in order
to access the use of a product or to profit from a
service.
c. List price/Menu price: fixed price subordinates to
specific rules found in a list or catalogue.
2. Differential Pricing. These mechanisms produce prices
that are either based on customer or product
characteristics, are volume dependent or linked to
customer preferences. Among them:
a. Product feature dependent: the customer pays in
function of the product characteristics. This
method is suitable for configurable products.
Bundling of different products and services also
falls within this category
b. Customer characteristic dependent: the company
charges the customer in function of his/her
profile. Even though this method allows
maximizing the profits, the exploitation of the
different demand curves of the customers’
clusters raises some ethical concerns.
c. Volume dependent: the price is differentiated in
function of different volumes purchased.
d. Value-based: the price is established according to
the customers’ perception of the product or
service value.
3. Market Pricing. These mechanisms produce prices based
on real-time market conditions. The main types are:
57
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
a. Bargaining: the price is discussed among buyer
and seller and results are heavily affected by the
pre-existing power relationship among them.
b. Yield management: this economic technique aims
at calculating the best pricing policy for
optimizing profits based on real time modeling
and forecasting of demand behavior. It is suitable
for perishable goods like airline tickets or nights
in a hotel room.
c. Auction: the seller offers a product or service out
for bid and then sells it to the highest bidder.
There are several auction types and mechanisms.
d. Reverse Auction: in this scheme the buyer will
post a price at which the bidding starts and the
lower bidder will win the right to sell the item.
The reviewed literature, together with the experience gained
within the (EUPASS, 2004-2009) and the (IDEAS, 2010-2013) projects,
allows at this point portraying the specific state of the art in the
domain of this dissertation. The scope of this depiction is limited to
the aspects considered relevant for the work: only the main activities
that carry a clearly defined value proposition along with the related
stakeholders have been described. In order to facilitate the
comprehension of the rationale behind the structure chosen for the
representation of the current practice, all the necessary concepts are
explicitly recalled along the text and consequently collocated in a
unified framework. In particular, this state of the art is organized in
two sections: the first one oriented to the activities related with the
58
Chapter 2. Literature Search and Analysis
design development and use of an AAS, the second one introduces
the lifecycle of such an installation. Both these perspectives are
fundamental as they will be mirrored in the introduced
contributions.
How an AAS comes to life is a very complex question to answer
for several different reasons. Nowadays, each AAS is basically a
prototype developed around a specific product (or product family
for the FAS): there are no standardised machines and, therefore,
procedures for their integration. The process flexibility achievable,
for example, in the manufacturing domain through CNC multiaxis
machining centers, has no match in the world of assembly. Some
general purpose assembly machines have been developed but only
for very specific applications such as electronic board mounting
based on standardized components.
The current state of the industrially applied automation
technology is such that in order to develop and deploy an AAS a
large and heterogeneous set of analyses and integration activities are
required. The broad spectrum of competencies necessary for this
process can be distributed in different ways among several subjects:
from one extreme in which a single company, relying only on the
internal resources, is able to carry out the whole set of activities to
create its own AAS to another extreme in which the process is
atomically exploded and allocated onto a large number of different
independent partner firms. In general it is really rare that
manufacturing companies choose to posess the amount of expertise
that goes beyond the simple use of their own AAS: therefore it is
safe to say that the average scenario is quite closer to the latter
extreme. Summarizing, when the need for an AAS appears the issue
is tackled in several stages by different experts that rely on their
internal procedures and expertise: in other words the underling
production paradigm for an AAS is nowadays the well-known
Engineer to Order.
59
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
In order to avoid confusion it is necessary to clarify the two-fold
use of the concept of production paradigm in this work. (Bi et al.,
2008) introduced a clear taxonomy of the, by then, available
production paradigms. Traditionally this concept is used in relation
with the product produced by a firm: EPSs as well as FMSs or RMSs
are among the above mentioned examples in this respect.
Nevertheless if one considers the production system as a (very
complex) product itself, then the concept can also be broadened to
this domain, in which, as discussed above, the current approach is
the ETO. In the thesis the different use of the two meanings is
always clear in relation to the context.
One final consideration: the review of the literature has put in
evidence advanced technologies that might enable different, more
efficient, manufacturing strategies and consequent production
paradigms. For instance, the modularity of production systems has
been widely investigated and embodied in quite a few applications
and different production paradigms (included EPS). Nevertheless
these advancements have not yet been fully implemented through
coherent and holistic manufacturing strategies: therefore they do not
fit the purpose of this state of the art.
The manufacturing strategy applied for a product depends on a
combination of factors: among them the available technology and
the required output in terms of quantity and quality hold the highest
impact. Given AASs’ complexity and the relatively low volumes
required, and considering the possibilities offered by the
mainstream automation technology these systems are nowadays
engineered only at the order.
60
Chapter 2. Literature Search and Analysis
Engineer to Order
Software
Electrical
Mechanical
Company
System
Integrators
Equipment
Suppliers
Product
Full Design
Analysis of the
product and of
the market
• Volumes
• Mix
• …
Demand for
automatic
solutions
Available
Equipment
System
requirement
Collection of
Equipment
Physical and
Logical
Integration
Automatic
Assembly
System
Customized
products
Catalogue
products
Services:
• Training
• Maintenance
• …
Figure 13 Development
Development of an AAS:
to Order paradigm and
Fig.XXX
of anEngineer
automatic
associated business models
assembly system: Engineer to Order paradigm
Figure
13 shows a business
complete overview
and associated
models of the ETO approach
currently in use for the realization of an AAS. There are three main
stakeholders that concur in this process. They exploit the value
61
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
proposition offered through their interlinked single business
models. In detail:



The company that requires and uses the installation.
They design the product and devise the expected trend of
the sales that are the basis for the dimensioning of the
AAS.
A set of system integrators (hence SIs) that performs the
necessary analysis and integration activities. Their
number and specializations are variable in relation with
the nature and the size of the system to be deployed.
They usually provide training to the company.
The automation equipment suppliers (hence ESs) that
provide the necessary building blocks for the system.
Many of them offer customized solutions along with
catalogue products.
The resulting installation is a highly customized system, able to
serve exclusively the committing company that therefore owns it. Of
course the use of flexible machines such as robots or AGVs opens up
the possibility for leasing them, as they will still have a market value
after their use. Still, the whole work of analysis and integration,
which often makes up the bigger part of the costs, must be sustained
by the company.
This description is aimed at underlining the value proposition behind
the current technology in terms of necessary activities: the way these are
allocated and performed is not fundamental for the purpose of this work.
The depicted scenario is an average one among the multitude of the
possible ones: it has only the function to provide a possible instance
of the process.
62
Chapter 2. Literature Search and Analysis
Volumes
New
Compatible
Product
Order
Legacy
Equipment
Production
Production
Product
Re-use
Dispose
System Engineering
Decline
Maturity
Ramp up
Integration
Time
Sell
Analysis
Introd.
Re-engineering
Figure 14 Lifecycle of an Automatic Assembly System
The description of an AAS’s standard lifecycle is a fundamental
element in order to fully understand the disruptiveness of the EPS
paradigm in comparison to current practices.
The temporal
dimension has been, in fact, one of the most important discriminant
issues for the structure of the forthcoming analysis of the value
proposition of an EPS.
The traditional representation of the lifecycle of a production
system includes usually only the phase in which it is productive for
the company that uses it. According with the purpose of this
dissertation, the introduced portrayal uses a more holistic perspective
based on the time frame in which the system is able to produce value: the
concept has been therefore stretched beyond the plain productive
life of the installation in order to encompass all of the design
development and production processes. Chapter 4 will clarify how a
63
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
large amount of the disruptive potential of the EPS paradigm lies
outside of the actual use of the AAS.
Figure 14 provides a graphic characterization of this extended
lifecycle. The main axis is the horizontal one and it represents the
time: the scale has no quantitative value; the only purpose is to
support and visualize the correct sequencing of the different
processes plotted on the chart. With reference to the previous
paragraph one can say that the first relevant moment for this
description is the order of a new AAS. Such an event is triggered by
the need of a company to assemble a particular product. The order
results in the engineering phase. This step includes a heterogeneous
set of highly knowledge-intensive activities such as product and
methods analysis or mechanical and logical integration of hardware. When
the system is integrated and tested the productive phase begins. The
nominal volumes, and in general the full effectiveness of the system
is reached after an introduction phase in which it is necessary to
cope with all the problems related with the integration of the
system. Once the major issues are solved the system can ramp-up to
its maturity phase where all the potential is delivered. This trend is
shown in red with reference to the central vertical axis that
represents the volumes.
The end of the productive phase usually occurs when the
product becomes obsolete. When this happens two possibilities
commonly arise:
1. The assembly system is still suitable, after a reengineering phase, to serve the company assembling a
new product. Re-engineering can be very simple if it
involves simple reprogramming and modification of
tools like grippers or fixtures. More complex scenarios
might involve partial mechanical rebuilding of the
system and especially a massive redefinition of the
control logic: in that case the costs and needed time for
64
Chapter 2. Literature Search and Analysis
re-engineering can equal the ones to set up a completely
new AAS. Therefore, in general, such a solution is
convenient only when the changes on the product are
merely cosmetic, or the cost of the equipment is very high
(e.g. in automotive industry).
2. There is no convenience/application for re-engineering
the system. In that case the system can be dismantled and
the components re-used inside the company or sold. If
none of the pervious options is available the system must
still be disposed of properly with a cost for the company
The literature review has put in evidence the disruptive potential
of new production technologies such as RMS and EPS when
compared with the state of the art in the automation domain.
Modular hardware and software architectures along with
distributed control approaches are a substantial shift respect to the
current automatic production systems based on integral
architectures and on centralized and hierarchical control. A wellknown problem related to such technological advancements lies in
finding how disruptive innovations can be successfully introduced
in the market: the general triggering issue of this work is, in
particular, how can manufacturing enterprises shift from a
traditional approach to automation, funded on integral
architecture and centralized control, to a completely different one
based on the modularity of the hardware and software solutions
coupled with a distributed control logic. Taking a quick look
backwards, a useful hint provided in the literature is related to the
basic understanding of the concept of disruptive technology. The
lack of awareness (mainly among non-technical personnel) of the
potential for actual performance improvement related with a
disruptive technology is mainly due to the fact that it often
65
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
introduces a very different set of attributes from the ones
mainstream customers historically value, and they frequently
perform poorly in the aspects that the current users hold in highest
consideration.
As already mentioned disruptive technologies have been always
defined in relationship with the mainstream practice in a particular
domain. It is important to notice at this point how the state of the art
in industry is determined by a combination of different aspects:
from technical to financial, until managerial and social. In order to
have a full perception of the disruptiveness related to a new
technology it is therefore necessary to approach the problem from all
these different points of view. Concerning the domain of this work,
on one hand the literature has put in evidence a great body of
knowledge that explain the technical differences between the current
and the new production paradigms, on the other hand it has also
disclosed an absence of significant structured contributions able to
enlighten the disruptiveness of such advancements from a more
customer-oriented perspective. Specifically, the requirement and
implication of the actual introduction of such technology in industry
is addressed in the literature only from a very general and
qualitative point of view. Concluding one can say that the
disruptiveness of such technologies from the technical point of view
has been sufficiently studied and defined, while their managerial
and financial disruptiveness has not been object of equally
rigorous contributions.
In view of the above and given the inherent complexity of the
development of an automatic production system, this issue cannot
be approached with traditional tools of analysis already in use in the
domain such as product, processes or organization. For the same
reason in order to effectively target these gaps it is necessary to
extend the analysis beyond the boundary of the company that uses
the production system, encompassing all the relevant stakeholders.
66
Chapter 2. Literature Search and Analysis
This calls for a more holistic approach, as found in the newly
established concept of Business Model, and a suitable vehicle to
bring significant knowledge to the involved organizations with
respect to adoption of such novel technologies. Scholars and
practitioners have established that new technologies need aptly
designed business models in order to free their potential
profitability. Even though no specific work has addressed the
problem of the relationship between new disruptive production
technology and related required business models, many
definitions, classifications and tools have been developed to support
this design activity. These contributions are often related to the ebusiness domain, but some of the underlined facts and unraveled
theories and relationships have a wider, general scope.
The central aspect of any business model is the value proposition
upon which it is built. Complex objects such as automatic assembly
systems have very articulated value propositions that transcend the
simple “assemble the product”. The literature provides detailed
description of several aspects of a value proposition, yet it also
highlights the absence of suitable, specific, models to describe the
different facets of an automatic assembly system’s value
proposition.
This chapter summarizes all the necessary input for the research
work carried out in this dissertation. First and most important part
of the chapter is a literature review of the topics that serve as
foundations for the contributions proposed in this dissertation. In
particular such analyses have been articulated in three sections
which are linked in a logical sequence. Initially the broad domain of
assembly automation is briefly characterized in its traditional
approaches and the latest conceptual and practical developments are
brought to attention. Among them the disruptive evolvable paradigm
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
is then described in all the salient aspects. The concept of innovation
and in particular the so called disruptive technologies are consequently
reviewed and presented. Finally the business model domain is
thoroughly scrutinized with the aim of extracting a suitable set of
constructs to support the process of bringing to market disruptive
production innovation.
The information gathered with the literature analysis has then
been passed through the lens of industrial perspective obtained
through the research background in European projects. This, in turn,
allows depicting the utmost benchmark for this work: a state of the
art for the process of development and integration of an automatic
assembly system. Finally the practical knowledge gaps encountered
during the analyses are described in order to set the scene for the
specific problem definition targeted by the research efforts.
68
The recent progresses in the ICT domain have been reflected in
the manufacturing field with, among the other things, an increasing
interest towards the application of Artificial Intelligence within
production systems. Within this trend the EPS paradigm has been
established with the aim of simplifying the labor intensive analysis
and integration activities connected with industrial automation
system development and deployment. The underlying technology is
based on a modular system architecture in which the control is
distributed among the different modules that therefore can, to a
certain extent, autonomously handle the required processes and
interactions. However, while the EPS paradigm has been proved
technically applicable at pre-industrial level there is still a significant
lack of contributions related to the requirements to bring such
technology to market.
Any significant technological shift offers interesting possibilities
to a firm but, at the same time, it poses serious challenges to its
internal organization and relationships with the external
environment. The full exploitation of the associated potential can
only be achieved if the firm is able to properly align the
technological inputs with a coherent business model able to create
and capture such value. In addition, the inability of a firm in doing
so might even endanger the survival of the company in the first
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
place (which has been seen in previous technology pushes in the
past decades).
The definition of the state of the art has revealed that the EPS
technical embodiment is highly disruptive with respect to the
current industrial scenarios. This creates real difficulties for the
managers to frame such systems in their dominant logic and therefore
in the manufacturing strategy of the company. This work intends to
provide the means to support a better understanding of an EPS
value and of the requirements for aligning such technology with the
business domain.
The aim of this work is to investigate the value proposition of an
EPS and describe the business models able to profit from it.
However, this purpose needs to be measured against the current
technical embodiment of the EPS paradigm. Such systems are not
yet on the market; therefore the analysis must be carried out at
conceptual level and only considering the subset of building
constructs that is definable at this stage of maturity of the paradigm.
In conclusion, this dissertation is not intended to provide the full
rationale behind the process of proficiently bringing EPS technology
to market, but rather to enable a better understanding of the related
issues. Although necessarily limited, this first rigorous
characterization of the specific value behind EPS enhances the
awareness about potential applications and consequently can steer
further technical development. Ultimately, the methods used in this
dissertation provide a valuable pathway for studying the value
definition, creation and capturing of any technical, disruptive,
innovation.
This chapter also summarizes the research methodology adopted
in this work. The first step is a clear identification and description of
the problem connected with bringing to market disruptive
innovation. The specific lack of constructs connected with such a
predicament are then isolated and described. This, in turn, leads to
70
Chapter 3. Research Approach
the individuation of the research requirements and consequent
research objectives for this work. Finally, the hypothesis defended in
this dissertation is presented and decomposed in basic operative
predicates. Conclusions include an overview of the consequent
scientific contributions of this work and are provided along with the
validation strategy.
The value of any scientific work lies in the relevance and on the
quality of the consequent predictions that one has generated on the
future behavior of the analized object. While the quality of these
inferences depends mostly on the methods used during the late
research work, the relevance is instead heavily affected by the earlier
stages of the process: the definition of the problem. Thus, in this
paragraph the general knowledge gaps individuated in the previous
chapter are translated into a specific matter that is the necessary
starting point of every scientific work. The inputs for this process are
the literature reviewed and analized along with the industrial
requirement and perspective provided by the collaborative research
projects.
Figure 15 provides a first schematic overview on the issues
addressed by this work and set the scene for the forthcoming
development.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Basic Research
Principles
General problems:



Mid Term
Applied Research
Disruptive
Technology
Sustaining
Technology
Agility
Sustainability
....
Strategy
Manufacturing
Strategy
Missing
Mechanism
Short Term
Applied Research
Current
Technology
Specific problems
Innovation
Loop
Production System
Figure 15 Problem Definition 1: traditional innovation loop and disruptive
technologies
The theme of innovation in a conservative domain such as
production is often limited to a very short term perspective.
Traditionally, the technology in use is updated through small
cumulative steps (continuous innovation) triggered by specific
production problems. These problems are strongly related to the
system in use, which leads the research activities connected not
being able to span much further from the mainstream approaches. In
many cases, in fact, this activity is so close to the specific production
system that it can be classified as mere problem solving. Therefore the
72
Chapter 3. Research Approach
consequent development required can be classified as consultancy
rather than original scientific work. This is, of course, not a problem
itself: many of today’s industrial problems can be solved by aligning
the firm with the best practice.
However, companies are nowadays threatened, among the other
things, by volatile markets and global competitors and this imposes
heavier and heavier demands on their manufacturing capabilities.
At strategic level, managers appeal for both agile and sustainable
manufacturing solutions. Production systems must be, in other
words, able to seamlessly follow the market and rationalize the
financial exposition. These challenges need an approach that
transcends the conventional innovation loop based on iterative small
upgrades described above. In order to enable this change of
perspective, researchers might have to broaden their analysis’ range
and look into technologies that are less mature and sometimes out of
the mainstream trends.
The (EUPASS-ROADMAP, 2008) pointed out how only a
significant technological shift can enable to effectively address such
issues. On this line of thought the development of the EPS
paradigm, and its application to the domain of automatic assembly,
is a clear rupture with the state of the art. Modular architecture,
along with distributed control based on multi-agent systems are
quite a shift from the current “engineered to order” and
hierarchically controlled installations. The promises of EPS are quick
reconfigurations (agility) and higher value for the money invested
(sustainability). However, even though a technology is developed
according to clear industrial requirements, surprisingly when it is,
like EPS, far from the mainstream approaches, it usually results in
having a hard time in finding its way to actual industrial
application.
Some explanations for this paradox can be found within the
internal side of the manufacturing company. The literature analysis
73
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
has shown how managers act according to a set of rules and values
learned throughout their experience in the organization: a dominant
logic ((Prahalad and Bettis, 1986)) which drives their choices.
Anything out of this set of bias is therefore excluded a-priori from
being applied. Although this is a valuable hint it is not enough to
frame the issue correctly. Technological innovation has an impact
that is far from being limited to the focal firm.
Performance
(Christensen, 1997) has broadened the perspective of the analysis
beyond the firm by including the market. He introduced the concept
of disruptive innovation for the technologies that initially
underperform along performance dimensions that mainstream
customers valued, while bringing at the same time new performance
attributes to the market (see Figure 16).
Gap
ance
Perform he
dt
require
market
m
a
e
r
t
s
in
a
m
Potential trajectory of
performance
improvement for
disruptive innovation
Time
Figure 16 Initial gap between disruptive innovation performance and
mainstream market requirement
Therefore firms which are very close to their mainstream
customers would fail to see the potential offered by a disruptive
74
Chapter 3. Research Approach
technology because too focused in fulfilling their current demands.
Consequently they will not work to fill the technical or
organizational gap that can enable the use of such technology.
In the domain of automation technology for industry the
suppliers work strictly according to the indication of the customer.
Therefore, this theory provides a good background to understand
the paradox described above in relation with the EPS technology.
One the one hand the EPS paradigm is very promising in terms of
quick reconfiguration and enhancement of the investments’ value
which are attributes not yet fully understood to such an extent by
the market. On the other hand it is still not fully developed from the
technical point of view and it would need a more applicationtargeted research to yield robust production technology.
Nevertheless short term applied research only looks at sustaining
technologies because they are compatible with the customer
requirement. With reference to Figure 15 this predicament can be
summarized in the lack of a mechanism able, in this very conservative
and customer oriented domain, to bring disruptive technologies to
market.
The following Figure 17 summarizes how EPS are not in line
with the business models underpinned by the state of the art (see §
2.5). Modular system architecture and distributed autonomous
control does not foster an Engineer to Order production paradigm.
75
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Mainstream Production
Technologies
New Disruptive
Production Technologies
Current Production
Systems
Evolvable Production
System
Value Proposition
Offering
Offering
Offering
Equipment Suppliers
System Integrators
Company
Barrier:
disruptive
technologies
are not
compatible
with existing
business!!!
Need for
new specific
business
models
Engineer to Order
Figure 17 Problem definition 2: need for new business models
The underlying condition for the adoption of an innovative
technology is the understanding of the potential in it, and especially
of the way such potential can be monetized. According with this line
of thought the following Figure 18 exemplifies the detailed problem
definition for this work.
76
Chapter 3. Research Approach
New Disruptive
Production Technologies
Evolvable Production
Systems
Value Proposition
Offering
Offering
Offering
Business
Model
Business
Model
Business
Model
Undefined Value
Propositions
Undefined
associated
Business Models
Stakeholders of the
production system
Advanced Production Paradigm:
towards Plug to Order
Figure 18 Problem definition 3: overview
The value proposition of an EPS must be defined to its full
extent. Like in any other complex product there are several
potential, explicit and implicit sources of value in an EPS. It is
therefore necessary to identify all the single elementary offerings for
each element of the system and in each stage of the lifecycle of such
an installation. The atomic offering needs then to be translated in
business models able to create the latent value and capture it. Finally
the features of the stakeholders that profits from one or more of the
business models defined must be described along with their
77
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
interaction. This will provide an overview of the general production
paradigm envisaged for the EPS and described in the following
paragraph.
The state of the art portrayed in the previous chapter has shown
how the engineer to order is the current production paradigm when it
comes to design, develop and building of an automatic assembly
system. This is of course determined by the available technology
that requires massive amount of knowledge intensive analysis and
integration activities to reliably conceive and deploy an AAS. Each
system is basically a prototype built around a specific problem
embodied in a product to be assembled.
A possible way of simplifying the complex activities mentioned
above has been underlined by the adoption of modular structures
both for the hardware and the control. This approach, together with
the development of aptly designed tools to support a quick,
computer-aided composition of the modules, has paved the way to a
shift in the potential production paradigm: from the traditional ETO
to a more efficient Configure to Order (hence CTO). (Kratochvil and
Carson, 2005) have described the feature of CTO as an approach
based on quick and guided integration of pre-defined blocks of
hardware and software. The customization of the product is delayed
until the last step of the development process.
The EPS paradigm, among others, has adopted the modular
approach and it is now putting the focus on the introduction of
artificial intelligence in the manufacturing domain. The aim is to
achieve systems that autonomously handle the tasks related with
production. The features of such a system have been described by
(Arai et al., 2001) that called such a concept “plug and produce” in
analogy with the IT domain. This shift is, in fact, qualitatively
78
Chapter 3. Research Approach
comparable to the one observed in the evolution of computers, a few
years ago connecting a new device to a pc required a configuration
process: usually the installation of specific driver software.
Nowadays the pc user enjoys plug and play devices. Following the
same logic, the underlying production paradigm can be therefore
named Plug to Order (hence PTO).
The following Figure 19 introduces the pattern described above:
the relevant approaches to automation have been plotted in a two
dimensional chart. The first, vertical, axis refers to the performance
of the system. The scale is qualitative and it is only aimed at placing
the different paradigms in a correct relative position among each
other. The performance’s aspects taken into account here are the
ones tightly related with the agility of the system and its
sustainability, as discussed in the literature analysis. In particular:



lead time: for the assembly system to productive level
variants: ability to agilely handle different variants
turbulent markets: ability to cope with volume, mix, or even
desired product feature variations
The horizontal axis identifies three discreet areas that represent
the individuated production paradigms related with the
development of an automatic assembly system. The two lower
additional horizontal axes are introducing the discriminants
between the different automation technologies and consequent
production paradigms. The first one depicts the evolution of the
control, from generic hierarchical and centralized to distributed and
autonomous though the necessary intermediate stage of its
modularization. The second one portrays the parallel development
of the hardware: from an integral, more and more complex,
approach to a modular one.
79
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Performance:
Evolvable
Assembly
System
Today
Flexible
Assembly
System
Research efforts:
Modular
Assembly
System
•
•
•
•
•
Dedicated
Assembly
System
Control
Hardware
Hierarchical
Intelligent
manufacturing
systems domain
Centralized
Modular
Distributed
Integral Complex
Engineer
to Order
Self Configuration
Self Organization
Self Learning
Self Diagnostic
....
Plug and Produce
• Lead time
• Variants
• Turbulent
markets
Autonomous
Modular
Configure
to Order
Plug
to Order
Production Paradigms
Figure 19 Positioning of relevant approaches to automation in relation to
performance and underlying production paradigm
EPS paradigm appears to be now in a transitional phase: on the
one hand the modularity of the hardware and of the control,
through the multi agent approach, has been fully achieved and
embodied also in semi-industrial aforementioned applications; on
the other hand the research effort has already proven ((Onori et al.,
2012)) the possibility to physically and logically distribute the
control process and it is nowadays addressing the issues of the
autonomy of the system. PTO is therefore the shift in the production
paradigm that is envisaged as direct consequence of the
development to its full extent of the EPS paradigm.
Once again it is useful to recall for the reader that production
paradigm in this work is used for both the domain of a generic
product and the one of a production system. EPS is hereby a
80
Chapter 3. Research Approach
production paradigm that targets a generic product, while the newly
defined PTO is a production paradigm in relation with the
production system itself. The choice of not distinguishing them
through different notations comes from the will of enabling the
perception of the fractal scope of this reasoning where the
production system is seen as a (very complex) product itself.
As direct consequence of the knowledge gaps emerged from the
literature review, the main purpose of this dissertation is to identify
and describe the key aspects of the business models that can bring the
EPS paradigm to market. Two challenges, again identified through
the literature review, qualify this issue for scientific research work:
1. The EPS paradigm is neither embodied in industrial
systems nor has its development been clearly steered
toward specific applications.
2. The concept of business model has very broad and
diversified spectrum of meanings and it is conceptually
underdeveloped.
These considerations lead to the first and utmost research
objective: identify a suitable approach to describe the business
model of an early stage production technology.
The necessary inputs for this purpose have been identified
through the literature analysis detailed in Chapter 2. The resulting
set of constructs encompasses all the elements deemed significant at
this stage of technological maturity of an EPS.
This necessary background sets the scene for a structured
approach to solve the initial problem. The second research objective
is therefore describing, entirely, the value proposition of EPS
technology with regard to automatic assembly domain.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
This will provide a good understanding of the business
opportunities offered by the EPS paradigm.
Consequently, the third and last objective is describing the
business model able to underpin the creation and capturing of the
value related with each single offering. Both these objectives will
require the original combination of different constructs identified in
the literature review. In particular with reference to the former
objective the relevant available elements must be organized in a
coherent architecture able to unravel all the elementary offerings
that compose the overall value proposition, including the latent
ones. The latter objective will instead require at first to articulate the
activities and resources necessary to exploit any single offering and
eventually allocate them on different stakeholders. Finally the
definition of the interactions and interfaces among such stakeholders
is the last requirement to achieve the third objective and provide an
answer to the initial predicament of bringing EPS to market.
A well-known problem related to discontinuous innovative
production technologies is their correct introduction and alignment
with the pre-existing working logic of the firms. Everyone agrees
that innovation offers to firm possibilities to gain competitive
advantage. Nevertheless the other side of the medal is that wrong or
partial applications might cause losses or even endanger the
existence of the firm in the first place. For instance, with reference to
the state of the art defined in chapter 2, EPS technology can
“destroy” the value of some competences of current system
integrators or it can impose new requirements for the equipment
suppliers.
Another dimension to the complexity of this problem is added
when, like for the EPS, the technology is disruptive. In this work a
82
Chapter 3. Research Approach
disruptive innovation is an innovation that is outperformed by the
present practice on the aspects valued by current customers, but that
introduces a complete new set of attributes that, if correctly
developed, can rewrite the customer preferences. The production
domain is traditionally conservative and driven by the customer
needs: not the best condition for disruptive technology to thrive.
Summarizing, in order to exploit at full the potential of innovation
firms must: (1) understand correctly the real potential of the
innovation and identify the ways of profiting from it, and (2)
accordingly structure their internal organization and relationships
with the external environment.
In view of the above, the need for a holistic and systematic
approach to effectively tackle these challenges is clear. It is necessary,
in other words, to break the vicious circle depicted throughout this chapter
by providing companies with a suitable decision framework that enables
rational decisions regarding the adoption of innovative, disruptive
technologies. The hypothesis underlying this work is that the concept
of business model is a valid support to solve the problem of
bringing the EPS technology and in general any non-fully mature
and disruptive innovation, to proficient applications in the
production domain. This hypothesis must be read bearing in mind
the specific constraints imposed by the current embodiment of the
EPS paradigm. As a matter of fact EPS is not a fully mature
technology and thus it has not yet yielded real industrial
applications. Consequently this analysis is not aimed at optimizing
existing solutions, but rather at conceptually defining a set of
business models that can serve the purpose of bringing the EPS
technology to market.
The hypothesis presented above is purely qualitative. In order
to retrieve concrete directions for proceeding with this work it is
necessary to break such statements into operative predicates that can
be verified through specific contributions. Business model is a
relatively newly established, broad and scarcely formalized concept.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The motivation behind the development of any business model is
the possibility of profiting from a value proposition. Complex
products such as automatic assembly systems may have a very
multifaceted value proposition. To foster full understanding it is
then necessary to decompose such a construct in all its atomic
offerings. This is not a trivial task as many of the offerings are not
obvious or subordinated to other ones (latent). This consideration
underpins the first predicate for this work: check whether it is
possible to define a structured model which captures all the
elementary offerings that compose the value proposition of an
Evolvable Assembly System (or any other system based on nonfully mature and disruptive technology), such that it may lead to
establishing the relative business models.
This leads to the second predicate: if it is possible to define a
model which encompasses all the elements necessary to translate
the identified offerings in a set of coherent business models able
to create and capture the associated value, then it is possible to
solve the problem of bringing EPS technology (or any other not
fully mature and disruptive technology) to market.
The individuated sections of the research Hypothesis call for the
following two contributions: (1) a Value Proposition Model and (2)
a Production Paradigm Model. Both these models are instantiated
on the Evolvable Production System paradigm. For this reason the
Hypotheses refers to such innovative technology.
Finally, new technology can be introduced in a field by
incumbent firms or newly established, entrant, ones. Some authors
have argued that existing firms have more inertia to changes, others
have suggested that they can profit from their existing structures.
This work has been triggered by the observation of the attitude
towards innovative production technologies in well-established
organizations; however the constructs and models provided are
independent from the particular status of incumbent or new entrant
of a company.
84
Definition of Knowledge Gaps
Industrial
Perspective
State of the art
Industrial
Requirements
Literature
Analysis
Supporting Concepts
Problem Definition
Definition of research
objectives
Definition of research
requirements
Chapter 3
Library Search
Chapter 2
Chapter 3. Research Approach
EPS Business Models
Validation
Proof of Concept
IDEAS Pre-demonstrator: Value
Proposition
IDEAS Pre-demonstrator:
Business Models
IDEAS Pre-demonstrator’s Value
Proposition complies with
technical embodiment
IDEAS Pre-demonstrator’s
Business Models matches
technical embodiment
Discussion and Conclusion
Chapter 6
Value Proposition of EPS
Chapter 7
Knowledge Contributions
Chapter 4-5
Definition of Hypothesis
Figure 20 Research Methodology overview
85
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The research work behind this dissertation has followed the
structured methodology presented in Figure 20. As for any scientific
contribution the first stage of this study has been a clear
identification and explicit formulation of the knowledge gaps
targeted by this research. The main support for this work has been
the literature available in the relevant fields and the industrial
inputs gained thanks to the involvement in collaborative research
projects such as (EUPASS, 2004-2009) and (IDEAS, 2010-2013). In
particular the literature has been exploited through the following
activities:


Library search: focused on presenting the relevant
contribution in the different domains of interest for this
thesis. In particular the three areas covered by this survey
are: automatic assembly system development, the
evolvable production system paradigm and the concept of
disruptive technology.
Literature Analysis: aimed at critically narrowing down to a
set of useful supporting concepts the sections of literature
actively implemented as input for the scientific
contributions.
The industrial contribution has been two-fold: on the one hand it
has provided the necessary perspective that has integrated the
presented literature in the assessment of the state of the art for the
domain of AAS development; on the other hand it has provided the
necessary requirement to steer the process of literature analysis. The
knowledge gaps along with state of the art and supporting concepts
are the foundations for the problem definition of this work.
The problem definition is the place where all the different
constructs introduced find a collocation in a rational and unified
description of the domain of analysis. Consequently this leads to the
Research Objectives being explicitly defined and the Research
Requirements identified. Research Objectives and Requirements lead
86
Chapter 3. Research Approach
eventually to the formulation of the pivotal element of this
methodology: the Research Hypothesis. The Research Hypothesis is
eventually broken into predicates that are individually addressed by
the two scientific contributions. The first contribution is aimed at
disclosing the full value proposition of an EPS; the second, moving
from the results of the former, is aimed at describing the
mechanisms able to create and capture this value. This description is
based on the resources and activities to be put in place for each
elementary value offering. The consequent business models are
finally referred to as a set of stakeholders which cooperate in the
overall envisaged production paradigm of an EPS.
The complete validation of both value proposition and related
business models would require a full scale application of the EPS
paradigm at industrial level. Given the technological maturity of the
subject this is currently not achievable within the scope of this work.
Therefore the validation process has been based on the predemonstrator of the IDEAS project: this system has been developed
independently from this work following only a narrow set of
technical specifications. Nevertheless being basically a legacy
industrial piece of equipment it provides all the means to prove the
validity of each contribution against the related research objective.
Finally the critical discussion about the implications of the
results allows drawing the conclusions and the requirements for
future cumulative work in the domain.
The validation is a fundamental part of any scientific work
because it adds scientific clout to the developed body of knowledge
that otherwise is reduced to mere problems solving or, even, plain
speculation. Validating a thesis is essentially the process of collecting
evidence supporting the original value of the work and organizing it in a
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
conceptually solid argumentation. Along with providing adequate
background and reinforcement for the logical construction of the
contributions, a fundamental element of a complete validation
strategy is an independent proof of concept for the thesis presented. In
general the supporting evidence can be found in different ways:
from mathematical proof to the realization of a physical prototype,
but also through benchmarking with other field, experts’ analysis
and indications or acceptance by peers: the approach to validation is
linked to the nature of the hypothesis and how it may be tested.
This process usually follows some well-defined patterns but it is
in fact a highly customized task, strongly dependent on the domain
and on the specific research objectives and hypotheses. Furthermore, the
resources available and consequent activities performed during the
research have usually a high impact on its validation strategy: time
constraints along with access to lab equipment or support from
experts in the field might steer the validation process and its scope
in one way or in another.
On an abstract level the work presented hereby deals with the
alignment of manufacturing strategy with business strategy: from
the literature analysis we infer that it is rather out of the mainstream
research efforts in this area. On the one hand in fact, traditional
contributions in this field are based on single tools of analysis such
as: product, firm, organization or network and are aimed at theory
building and testing. On the other hand, this dissertation provides a
new, more holistic, point of view on the overall production
paradigm associated with the development and exploitation of an
automatic assembly system: in particular the focus is on the concept
of business model. The aim is to underline the requirement in term of
business models for the introduction of new disruptive
manufacturing technologies, specifically the EPS paradigm, in
industry. The original use of existing constructs and the consequent
adoption of analytical motives and relationships from other domains
are therefore the main contributions of this thesis.
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Chapter 3. Research Approach
The supporting mechanism of the original scientific value of this
work is visually summarized in Figure 21 with the allegory of a
Greek temple. The set of pillars represent the elements put in place
to corroborate the logical structure of the work while the architrave
is the required independent proof of concept that supports the
scientific value of this work embodied in the pediment. Ultimately
the crepidoma, on which the temple is built, is the symbol for the
underlying principles of the scientific method.
Original Scientific
Value of this work
Project results
EUPASS IDEAS
Published Contributions
Experts opinions
External Coherence
Well-Established Constructs
Internal Coherence
Proof of Concept
Scientific Method
Figure 21 Allegorical representation of the structure supporting the original
scientific value of the work
In relation with the temple visualization, the first pillar includes
the internal mechanisms supporting the superior set whereas the
second pillar encompasses the contributing external factors. In
particular, the former, internal one is based on the:
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology


Use of constructs and relationships coming from wellestablished contributions available in literature for the
formalization of the problem. All the elements and concepts
presented throughout the argumentation have been
previously published by highly ranked institution and/or
scientific journals: this insures the peer acceptance of the
funding elements of this work. It is important to remark that
the overall scope of this work goes well beyond the punctual
aims of the included non-original constructs: the fresh
domain and the novel role they play in the “connecting
theme” of this analysis qualify this dissertation as an original
contribution to scientific knowledge rather than a mere
problem solving effort.
Internal coherence between the constructs and relationship
used to analyze and model the problems encountered. As
best as the author has been able to test, through own
experience and the discussions had with experts on the
domain, the logical structure that supports the work is free of
redundancies, conceptual loops or missing aspects
(according with the defined purposes and consequent
limitations of this work).
The latter, external, pillar is based on the:


90
Discussions and feedbacks from experts active along the
whole spectrum of the development of an automatic
production system: from end-users, to different kinds of
system integrators and equipment builders.
External coherence of the funding construct and
relationships of the used method: the issues and necessary
assumptions arisen during the work have been examined
through the lens of all potentially relevant perspectives. In
this thesis the business model concept is perceived as a
mediator between technical inputs and economical outputs.
Chapter 3. Research Approach
These elements are defined and measured in two separate
domains that have therefore concurred in defining the work.
Even though the third and fourth pillars have not been built with
the sole purpose of supporting the validity of this dissertation they
are strictly related to it. Both in fact are based on activities that share
the background and some of the purposes of this work. In particular
the third pillar is based on the relevant previous publications of the
author (see related section “List of Publications”). These
contributions have a dramatic impact on this work - they were
fundamental steps in the development of the basic ideas and
constructs presented here. Besides, on the same page as the specific
expert opinions in pillar number two, they have provided plenty of
criticism and feedback that have steered and shaped the work.
The fourth and last pillar is made up of the outcome of the
project work done for the (IDEAS, 2010-2013) and the (EUPASS,
2004-2009) by the author in tight cooperation with the other
members of the respective partner pools. The challenges tackled and
the consequent contributions produced in this inspiring framework
are partially aligned with the content of this dissertation. Therefore,
beside the elements directly derived from them, the whole logic
construction of this work is corroborated by the research process
and the associated findings.
As the four pillars ensure the logical construction and the peer
acceptance of the work an independent proof of concept represented
by the architrave is the necessary final support to the soundness of
the whole work. For this reason in Chapter 6 an independent
scenario, based on the IDEAS pre-demonstrator as it was showed at
FESTO is presented as conclusive evidence for the validity of the
concept.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
This chapter presents the motivations behind the thesis work
and formalizes the related research approach. In particular, the
knowledge gaps highlighted by the previous chapter are hereby
developed and detailed in the operative definition of the problem
addressed by this thesis. This, together with the supporting concept
of Plug to Order, permits to establish the requirements and
consequent objectives for the given research effort. The hypothesis
defended in this dissertation has been presented and elaborated in a
working form that pinpoints the intended knowledge contributions.
Finally the specific research methodology and validation strategy
adopted in this work are introduced and graphically exemplified.
92
The state of the art introduced in Chapter 2 has shown how the
development of an Automatic Assembly System is nowadays a very
complex and interdisciplinary process. Besides the internal
technology-related and business-related trade-offs the designer of
such an installation must also account for the interactions between
business and technology issues in the first place. The related
extended lifecycle (see § 2.4.3) of the system is a series of non-value
adding activities ranging from analysis and integration to reengineering and dismissing. The consequent dominant logic of the
manufacturing companies in connection with assembly automation
suggest that such installations are only able to produce value during
their use, and that this value comes with extremely high costs and
uncertainty.
In principle, the EPS paradigm offers solutions for reducing the
relative weight of non-value adding activities along with the
possibility of relaxing many of the business constraints thanks to the
capability of the investment to follow the market evolution. In other
words an EPS system is able to produce higher value for its
stakeholders throughout the whole lifecycle. Current production
paradigms and related biases concerning automation are an obstacle
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
for the technological development and subsequent application of
intelligent manufacturing solutions. A deeper understanding of the
potential behind such technology is a fundamental step towards a
proficient industrial embodiment.
After introducing the specific bottom-up analytical method, this
Chapter identifies the EPS elements deemed relevant for the
scrutiny. Each element is then considered along its whole lifecycle.
The resulting Atomic Value Offerings are thus investigated separately
and in connection with the other, potentially related, ones. Finally
the identified patterns are presented as prelude and necessary input
for the work presented in the following chapter. The identification of
the generic EPS’ elements, that supports the analysis, provides also
the means to define a simplified EPS cost model. This, in turn,
allows describing how the EPS concept can bring to a rational
stepwise approach to automation. Although, these two last
elaborations are not strictly necessary for the logical path depicted in
this chapter they have been included for the reader, as further
characterization of the identified constructs.
The aim of this chapter is to provide a clear description of the
EPS value proposition that can be used as a basis to conceptualize
suitable business models for such systems. This is not a trivial task
as an automatic assembly system is the product of several different
entities with multiple, often not aligned, purposes. In order to
account for all the multifaceted aspects associated with such
complex value proposition, the mainstream approach suggests
decomposing it in a set of independent value offerings. Each value
offering represents an aspect, a process or a service connected with
the superior object of the analysis. With reference to an AAS, while a
company might be, for instance, interested in profiting from the
capability of a robot to assemble components on a printed circuit
94
Chapter 4. Value Proposition of the
Evolvable Production System
board with a rate of six per second, another company can earn by
producing such robot, or selling it, or programming it.
When the analyzed object is fully defined then it is possible to
dissect its value proposition in a classical top-down fashion.
Identifying the elementary value offerings is, in other words, a mere
mapping process aimed at putting in evidence the aspects able to
independently generate value within the given framework. This is
not the case for an AAS. Automatic systems based on the evolvable
paradigm are still a work in progress in many aspects. While, in fact,
the main concepts have been established and proved suitable for
industrial requirements, they are still not embodied into actual
applications or machines available on the market. This renders
virtually impossible to determine the elementary value offering
connected with it using a traditional approach. A different analytical
method is therefore in need.
In view of the above, a structured analytical bottom-up
framework is hereby proposed and graphically exemplified in
Figure 22. Instead of exploding the high level value proposition in
exam, this method aims, on the contrary, at building up the required
set of relevant and representative value offerings. The first part of
the analysis has been, therefore, addressed at unraveling the
necessary building blocks for this aggregative process.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Evolvable Production
Systems
Value Proposition
_Set of
EPS Value
Offerings
Characterization
of the AVOs
Atomic Value
Offerings (AVOs)
Identified EPS
Relevant Elements
Lifecycle of the
Value Proposition
Bottom-Up Analysis
Figure 22 Overview of the analytical method for the individuation of the EPS
value offerings
In detail, this scrutiny has been conducted along the following
two fundamental dimensions:

96
Space. Explicit or latent offerings must be disclosed for all the
relevant elements that compose an Evolvable Assembly
Chapter 4. Value Proposition of the
Evolvable Production System

System. The identification of such elements is presented in
the next paragraph. A relevant element is a tangible or
intangible part of the superior value proposition that carries a
potentially independent value offering. Thus, the analysis has
been limited to the aspects that characterize an EAS: generic
supporting activities or resources have been left out because
not relevant to the purpose of this work.
Time. New value offerings for the same element can emerge
in different stages of an EAS‘s lifecycle. The five phases
considered in this enquiry are derived from (Osterwalder,
2004)’s classification of the lifecycle of a value proposition.
They have been widely described in section 2.3.3.3. A
summary of such constructs is included below as a support
for the reader. In particular:
o Value Creation. Phase in which the element is
physically created.
o Value Purchase. The process of transferring the
element from the supplier (creator) to the user.
o Value Use. Utilization of the element.
o Value Renewal. Update of the functionalities of the
element for new user requirements.
o Value Transfer. Transfer of the element to another
user, or dismissal.
This classification allows tabbing all the lower level offerings of
an EPS (see Figure 22). Such conceptualization is hereby named
Atomic Value Offering (hence AVO) and can be defined as the value
offering related to a single relevant element of the superior value
proposition, in a given phase of its lifecycle.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
TIME
EPS Lifecycle
SPACE
EPS Elements
Creation Purchase
1
AVO 1,C
2
AVO 1,P
3
4
...
N
...
...
...
...
AVO 2,C
...
...
...
...
...
Use
...
...
...
...
...
...
Renewal Transfer
...
...
...
...
...
...
...
...
...
...
...
AVO N,T
Figure 23 Tabulation of the AVOs classification
Once the AVOs have been identified it is necessary to
understand how they can be translated into a set of value offerings
that might underpin the business models necessary to put in place
an EAS. Even though, in fact, each AVO can theoretically spawn a
business model of its own, in practice, the current articulation that
the evolvable paradigm envisages for such process offers the
possibility to define a much more interesting superset of value
offerings for the subsequent formulation of EPS business models.
Therefore the second phase of the analysis consists of a
characterization process where each single AVO is put in relation
with all the others under the lens of the value proposition of the
whole system. In particular (1) logical, (2) functional and (3)
temporal dependencies among AVOs are enlightened. Finally the
single characterizations of the AVOs are combined into the
definition of the EPS value offerings.
As already mentioned above, the subject of the analysis
presented in this work is not a well-defined state of the art system,
but rather a newly proven concept for developing and engineering
automatic production systems. This has affected the analytical
method used and it is, of course, also reflected in the outputs of the
98
Chapter 4. Value Proposition of the
Evolvable Production System
analysis. While for actual industrial systems it is possible and
convenient to clearly define the related elementary value offerings
for an AAS such endeavor would be conceptually wrong as well as
impossible to fulfill. In view of this, as detailed in the following
paragraphs, this analysis is rather focused on highlighting a series of
patterns that shape and constrain the relationships among AVOs.
The resulting structure is then used as basis for the work presented
in the following chapter where such EPS value offering are rendered
into suitable business models.
Summarizing the proposed analytical method is articulated in
the following phases that are documented throughout the rest of this
chapter:
1. Identification of the Atomic Value Offerings of the
system,
2. Characterization of the AVOs as single entities and in
relation with each other,
3. Extrapolation of useful patterns for the definition of
sound business models.
As a final remark it is worth pinpointing that, although such an
analytical approach has been developed for studying the EPS, the
underlying method and definitions described in this chapter can be
extended to the analysis of any other complex value proposition.
The review of the literature has already introduced the most
important technical features of an Evolvable Production System (see
§ 2.1.3). Although, due to their disruptiveness, EPSs have still to
find a clear pattern to the market, the current level of development
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
allows identifying the elements that carry independent potential
value offerings. Figure 24 provides an overview of such constructs
and their physical and logical interconnection.
Mechatronic Agents
Machine
Resorce
Agent
Coalition
Leader
Agent
Skills
Transport.
System
Agent
Skills
Work
Work
Work
Stations
Work
Station
Work
Station
Station
Station
Modules
Modules
Modules
Modules
Product Agent
Workflow
Task
Task
Skills
Skills
Task
Skills
Agent to
Machine
Interface
Skills
Modular Platform
Product
Task
Skills
Evolvable Assembly System
Figure 24 Overview of an EPS: elements and interconnections
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Chapter 4. Value Proposition of the
Evolvable Production System
The main reference for the classification of the elements of an
EAS is the outcome of the IDEAS (IDEAS, 2010-2013) project. The
EPS paradigm revolves around the concept of Mechatronic Agent,
hence MA. In general, for the purpose of this work, each MA can be
considered as the composition of three elements: an (1) Agent which
is a piece of software able to foster a series of elementary behaviors.
Those behaviors allow the agent to interact with other agents and
exploits some (2) Skills. Skills are conceptual resources strictly
related to one or more pieces of (3) Hardware that is the physical
representation of the MA. Given the MA nature of hybrid
hardware/software entity the controller which allocates the agent
and the related skills is intended to be embedded with the rest of the
HW.
The MAs are the building blocks of an EPS; therefore they are
the logical reference to identify the relevant parts of such systems.
The current EPS Multi-Agent System Architecture is based on 5
different kinds of agent. Table 5 displays the salient features of each
agent:
Resource
Machine
Agent
(RMA)
Coalition
Leader
Agent
(CLA)
Transportation
System
Agent
(TSA)
Description
Hardware
Representation
Construct that abstracts mechatronic
modules which can be plugged and
unplugged from the system and that
host a set of executable skills.
Module
Construct that enables the
composition and execution of skills.
CLA supports the execution logic of
processes based on the available
skills in the system
Workstation (WS)
Constructs that abstracts the
components of the transportation
system. It provides localization,
transport and positioning
functionalities.
A Platform with
positions for the
WSs and Logistics
among them
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Product
Agent
(PA)
Agent to
Machine
Interface
(AMI)
Particular instance of CLA. PA
executes all the skills that match the
process requirement (workflow)
The Product and its
mean of travel
through the system
Constructs that works as a
harmonizing layer between Mas and
other hardware in the system.
-
Table 5 Summary of EPS Agent typologies: based on
(IDEAS-Deliverable1.4, 2011)
Summarizing we can identify the 6 elements that compose an
EAS and that therefore will be the basis of the analysis:
1. Multi-Agent System (hence MAS). It is the “Operative System”
of an EPS. It is a modular piece of software that can be
physically distributed according to the specific system
requirements. It includes all the generic behaviors able to
underpin a correct exploitation of the Skills.
2. Skill. Basic construct of the EPS paradigm. Skills are the
building blocks of both the EPS process model, identified in
the workflow, and of the EPS hardware identified by the
platform, the workstation and the modules. Skills are used
by the agents and they enclose the necessary information for
public interfacing as well as dynamic links with the system’s
low level libraries (specific of each mechatronic entity).
3. Workflow. Basic construct that represent the whole set of
skills and related logical configuration necessary to assemble
a product. A workflow is in essence the hierarchically
highest composite skill, thus it is governed by a CLA. The
Workflow is designed by the user in function of the process
requirement related to the product and the available
resources in the system.
4. Modular Platform. Hardware construct governed by the TSA.
The platform is composed by the repetition of standard
modules (or units) featuring: (a) Interfaces for other platform
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Chapter 4. Value Proposition of the
Evolvable Production System
modules, (b) standard slots for the workstations and (c)
logistic between the different slots. If in the system there is
requirement for non EPS hardware this needs to be
integrated with the platform.
5. Workstation (hence also WS). It is a particular point in the
system where one or more tasks are executed. From the
hardware point of view it is a collection of one or a more
modules. It is governed by a CLA based on processes
designed by the user: no further logical integration is
required. However, the modules composing a WS need to be
physically integrated. A workstation is able to provide the
material execution of skills at the intermediates hierarchical
level in the related workflow.
6. Module.
Construct
that
embodies
the
hardware
representation of a machine resource agent. A module is able
to provide the material execution of a skill at the lowest
hierarchical level in the related workflow.
The elements individuated cover all the relevant activities to be
carried out when implementing a new automatic assembly system.
It is important to remark that, as for any categorization activity, the
final purpose of the devised classification has been an utmost driver
in establishing the elements themselves. The aim of this process is to
put in evidence all the different components of an EAS that might
carry an independent value proposition. The independence between
these building constructs is ensured by the standardized languages
for the process (as seen in (IDEAS-Deliverable2.1, 2011)) and the
hardware (as seen in (IDEAS-Deliverable2.2, 2011)) description, both
firmly based on the concept of skills and therefore related to the
specific Multi-Agent platform. Finally the combination of this spatial
classification with the previously identified temporal one allows at
this point to fully define the domain of relevant AVOs for an EAS.
Figure 25 introduce the consequent matrix “Elements/Lifecycle” of
an EPS. Such Matrix not only is useful to logically display the whole
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
set of AVOs in exam, but it is also a valid tool for analyzing and
characterizing them.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
Elements
MAS
Skill
Workflow
Platform
WorkStation
Module
Figure 25 Matrix “Element/Lifecycle” for the identification and
characterization of the EPS’s AVOs.
The depicted representation of the EPS paradigm and the related
constructs allow at this point investigating the costs of buying and
running such an installation. The usual classification of costs
adopted for studying automatic installation is:
[1]
Fixed cost is that group of costs whose total will remain relatively
constant throughout the range of operational activity. That is, fixed
costs are more or less the same regardless of production rate,
number of shifts or people. Such entry usually represents
investments that are made in advance of the start of operation.
Machinery, and therefore AAS, is usually accounted as fixed costs.
Variable cost is that group of costs that vary in some relationship to
the level of operational activity. Electricity, tools, gripper, fixtures
are some examples in this category. People which work with
supporting activities associated with the AAS can be seen
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Chapter 4. Value Proposition of the
Evolvable Production System
theoretically as variable costs. For the limited purpose of this
analysis it is possible to consider them in such way, but in reality
union contracts and investment in training prevent company from
easily lay off such resource.
In EPS such a classification is not really useful: in principle all
the hardware and software resources can be easily shifted from one
production to another and they can be put in place in different
moments of the lifecycle of the plant. Therefore the model presented
hereby will focus instead on the direct cost associated with such
installations. In view of the EPS description used in this work, the
related simplified cost can be represented by the following equation:
∑
[2]
Where:
Cost of the platform. Included the cost required for
setting the TSA and related Skills.
Cost for the Workstation i.
Number of workstations
It is possible to detail better the cost of the platform as:
∑
[3]
Where:
Cost for the integration of the platform. Included the cost
required for setting the TSA and related Skills. This cost is not
dependent from the number of modules because the TSA and
the related skills are scalable.
Cost for the Workstation i.
Number of platform modules
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Fraction of the total cost of the platform module to be
depreciated on the current production. Platforms are in fact not
dependent on the particular production, but they serve
different products.
The EPS modular architecture promises seamless reconfiguration
and modules that can be seen as building blocks for several different
applications. Theoretically this means that modules could be
employed as flexible resources where they are needed within the
company, different lines of products, or even across different
companies that could share the risk of owning them. This
consideration allows at this point formulating the cost of a workstation
accounting of the possibility of reusing the modules for other
productions:
∑
[4]
Where:
Cost for the physical and logical integration of the workstation:
including the cost required for setting the CLA and related
Skills.
Cost of the Module j. Included the cost required for setting
the RMA and related Skills.
Fraction of the module’s overall cost to be depreciated on the
current production.
Number of modules in the workstation
The fixed cost for traditional automation, with some exceptions,
must be entirely put in place entirely before the production starts.
This is mainly due to the integral architecture of such installations.
Once again, thanks to the modular architecture and the irrelevant
costs of integration and management of the system redundancies,
EPS paradigm relaxes the constraints of buying the whole system
capacity at the beginning. EPS Modules can be purchased according
106
Chapter 4. Value Proposition of the
Evolvable Production System
with the volume trend: this allow the companies to achieve a better
balance in the cash flows. Figure 26 shows, from a purely conceptual
point of view, the impact of EPS on the financial exposition of a firm
that uses an AAS.
Volume
Evolvable System
Volume
Traditional System
Time
Time
Financial Exposition
EPS net advantage
Negative Cash-Flow
Positive Cash-Flow
Figure 26 Cash Flow associated with automation: EPS vs. Traditional
This consideration allows expressing the present value of the overall
investment required for an EPS accounting on the fact that in EPS the
negative cash flows related to automation occur, over the time, in a
discrete set of instants:
∑
(
)
[5]
Where:
Cost for the modules purchased at the instant t as described in
the following table. The modules can be both platform and
production modules.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Purchasing time:
Module
expressed as fraction
of reference period
starting at the t0
1
2
3
t1
t2
t3
M
total number of
WSs
tN
The rate of interest expressed as a fraction due at the
instant t.
The rate of interest expressed as a fraction due each reference
time period.
As seen in the previous paragraph, EPS modular architecture
and the related seamless integration process offer to companies an
unprecedented flexible approach to automation. On the one hand
the full automatic solution can be bought at the beginning and
scaled according to the volume by just adding more platforms; on
the other hand it is possible to buy automatic solutions only for a
restricted set of processes at the beginning, keeping the others
manual, and then move towards full automation as the volume
grows and/or the economic means allow it. Hybrids between these
two scenarios are also possible. This paragraph investigates the
second occurrence providing a simplified, yet valuable, tool to
support a rational stepwise approach to automation.
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Chapter 4. Value Proposition of the
Evolvable Production System
With reference to a generic product and assuming that:
1. The product is composed of N parts each one requiring a
single task to be assembled;
2. Each task can be performed by a human operator with
execution time equal to τM expressed in the unit of time;
3. Human operators are considered fully flexible resources:
therefore variable costs;
4. Each task can be performed by a specific automatic WS with
execution time equal to τA expressed in the unit of time;
5. The cost for the platform is only accounted when the first
automatic workstation is deployed. Such a cost is also
proportional to the number of automatic workstations: in
principle, in fact, an EPS platform is a flexible resource that
can be employed according to the needs.
6. The variable costs associated with the automatic solution
follow an exponential decay as the number of stations increase.
In particular, the function of decreasing can be modeled with
the following:
where is a coefficient depending
on the specific configuration of the cost.
7. The automatic WSs are introduced one at a time;
8. The cost of the money is not considered.
It is possible to define the following parametric expression for
the overall costs:
( )
( )
(
)
Where:
The parameter in exam representing the number of
automatic workstations in the system.
Cost of the operator per unit of time
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Product volumes
̅
(
̅
)
Where:
̅
Fixed investment for a Workstation
̅
Fixed investment for expanding the
platform each time a WS is added
Fraction of the platform to be allocated on
a workstation (assumed constant)
Cost
The following Figure 27 represents an indicative trend of this
formulation for the production costs in function of the volume. Each
different level of the parameter “number of automatic station in the
system” is represented by a line. The related parametric
formulations for intercept and slope are also represented.
Intercept:
𝐸𝑃𝑆
i=0
i = 1 i = 2 i = 3 ---(i = ...)--- i = N
Slope:
0 𝑀(
)+
𝐴
Volume
Figure 27 Graphical trend of the costs for a production system in function of the
production volume and for different amount (i) of automatic stations in the
system.
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Chapter 4. Value Proposition of the
Evolvable Production System
The following function represents the minimum cost associated
with producing a given volume:
( )
( )
Cost
The locus that fulfills such minimum condition is the polynomial
chain represented with green lines in Figure 28. The same figure
introduces also the parametric formulation of the coordinates of a
generic interception point between ( ) and
( ).
i=0
i = 1 i = 2 i = 3 ---(i = ...)--- i = N
Minimum
production costs
Interception between
( ) and
=
+1 (
)
𝐸𝑃𝑆
0 𝑀
+
=
𝐴(
+1 )
(̅ )
Figure 28 Polynomial chain representing the locus of minimum cost in
function of the production volumes and for different amount (i) of automatic
stations in the system.
The value of in each segment of such a polynomial chain
represents the economically optimal number of automatic stations
for the underlying production volumes. The value ̅ provides
therefore an indication of the volume beyond which it is
economically convenient to shift from a manufacturing strategy
based on automatic stations to one based on (
). By knowing
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Cost
the expected trend in the market demand for the product, it is
therefore possible to calculate the moment in which the (
)th
automatic station should be deployed. A graphical example of this
process is provided in Figure 29.
i=0
V3
VN-1
Volumes/
Demand
T1
T2
T3
TN-1
Time
Maturity
Develop
ment
Introduction
V1 V2
i = 1 i = 2 i = 3 --- i = ... --- i = N
Figure 29 Graphical calculation of the economically optimal instants Ti of
deployment for the (i+1)th automatic station
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Chapter 4. Value Proposition of the
Evolvable Production System
Knowing the lead time
for the ( +1)th automatic station it is
the possible to express the ordering time for such station as
following:
[6]
The identification of the six relevant elements of an automatic
evolvable assembly system in combination with the five phases in the
lifecycle of such system results in a set of thirty atomic value
offerings. Although these AVOs represent the most basic value
offerings related with an EPS, still they are not suitable, as they are,
to be used as basis to detail the EPS business models. The reason for
this lies in the fact that even if the single elements and the single
phases are respectively independent within their classes, the same
cannot be stated for the results of their combination. In other words,
even though it is theoretically possible to describe a business model
for each AVO individuated, the particular state of EPS poses some
requirements that must be used to shape and constrain the process
of identification of the eligible EPS value offerings.
The individuated AVOs must be characterized in order to
disclose their mutual influence. This, in turn, allows unrevealing the
patterns that lead to the required aggregation of the AVOs in a
super-set of offerings that can be interesting from a business
perspective (the EPS value offerings). The following Figure 30
illustrates the graphical tools used for such a characterization.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
AVO 2
Elements
Skill
Workflow
Platform
AVO 3
AVO 1
WorkStation
Module
Analyzed Atomic
Value Offering
LEGENDA:
Necessary
Precedence
Potential
Precedence
Tightly Coupled
Atomic Value Offering
Loosely Coupled
Atomic Value Offering
Figure 30 Matrix “Elements/Lifecycle” and related symbolism for the
analysis and representation of the interdependencies between the atomic
offerings of an EPS
The already defined matrix “Elements/Lifecycle” of the EPS
represents all the possible AVOs of such system: each cell identifies
a single AVO that relates to a particular element of an EPS in a given
moment of the system’s lifecycle. Such construct provides therefore
the framework for the analysis. Each AVO is then singularly
addressed in a separate matrix. The atomic value offering under
scrutiny is then put in relation with all the other AVOs one at the
time: thus, for each matrix, twenty-nine possible couples are
investigated independently through as many correspondent steps.
Such matrix is consequently filled with a number of colored cells
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Chapter 4. Value Proposition of the
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that represents the coupling relationship between the analyzed AVO
and all the others. In detail:



Red. The sole red cell in each matrix represents the atomic
offering analyzed in that particular graphical elaboration.
The deployment of all the other colored cell and arrows (see
later in this paragraph) is done in function of such red cell.
The resulting matrix is therefore identified with the name of
the AVO tabbed in the red cell.
Orange. The cells that corresponds to the AVOs that can be
coupled in a unique offering with the AVO under scrutiny
must be colored in orange. Such relationship must foster
economical, logistic or technological advantage. Examples of
this can be:
 Impossibility to decouple the two AVOs: the two
offerings can’t be exploited singularly.
 Providing
or
receiving
fundamental
information/resources.
 Sharing core resources/information.
Yellow. If an AVO is not necessarily to be given together with
the one in focus, but they affect somehow each other, then
the correspondent cell must be colored in yellow. Possible
example of such relationship are:
 Mutual reinforcement.
 Providing or receiving information for improvement.
 Providing or receiving necessary resources.
 Sharing supporting resources/information
 Sharing Customer
 Based on the same Capability
While the colors provide indication about the existence of the
relationship, the arrows represented in the Figure 30 indicate the
direction of it. In particular:
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology


Full bodied Arrow. It indicates a necessary precedence of the
starting AVO on the arriving one, with strong connection
between the two activities. Precedencies can be of different
natures: logical, temporal or technological.
Dotted Arrow. It indicates a necessary precedence between
the two involved AVOs, still not implying a critical mutual
influence of the involved activities.
In other words it is possible to say that given the necessary
precedence relationship full bodied arrows indicate a strong mutual
influence of the two interested AVOs, whereas the dotted ones are
deployed between value offerings that are independent from each
other. When the relationship has no direction or the direction is not
important from a business perspective then no arrow is introduced
among the interested cells.
The portrayed method leads to eight possible combinations of
relationships and precedencies between two AVO. The following figure
31 provides a graphical representation, a classification and a
synthetic characterization of such combinations.
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Chapter 4. Value Proposition of the
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ID
Analyzed
AVO
Secondary
AVO
Synthetic Description
I
Strong precedence
on dependent AVO
II
Strong precedence
on independent AVO
III
Logical precedence
on dependent AVO
IV
Logical precedence
on independent AVO
V
Must follow
a dependent AVO
VI
Must follow
an independent AVO
VII
Logically following
a dependent AVO
VIII
Logically following
an independent AVO
Figure 31 Classification and synthetic description of the possible combinations
between relationships and precedencies in the “Elements/Lifecycle” graphical
analysis
Exploiting the notation introduced it is now possible to provide
a structured description of each single occurrence:
I.
II.
Strong precedence on dependent AVO: the activities that allow
profiting from the two involved AVOs must be carried on
preferably by a unique stakeholder and necessarily in a
sequence starting from the ones related to the AVO under
scrutiny.
Strong precedence on independent AVO: the activities that allow
profiting from the two involved AVOs are independent but
they must necessarily be accomplished in a sequence that
starts with the ones related to the examined AVO. They can
interest more than one stakeholder, but the precedence
imposes a significant mutual awareness among them.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
III.
IV.
V.
VI.
VII.
VIII.
Logical precedence on dependent AVO: the activities that allow
profiting from the two involved AVOs must be carried on
preferably by a unique stakeholder starting from the ones
concerning the AVO in exam.
Logical precedence on independent AVO: the activities that allow
profiting from the two involved AVOs are independent but
they can preferably be accomplished in a sequence that starts
with the ones related to the examined AVO. Different
stakeholders that create the value connected with such AVOs
benefits from coordination of their processes.
Must follow a dependent AVO: this scenario is conceptually
analogous to scenario I, with the only difference that the
correct sequence for the activities start from the ones related
to the secondary AVO.
Must follow an independent AVO: similar to the combination II
but with necessary precedence of the activities related to the
secondary AVO on the ones related to the AVO under
scrutiny.
Logically following a dependent AVO: same as the scenario III
but with opposite preferred direction of the activities. The
first one to be accomplished are in fact the ones related with
profiting from the secondary AVO
Logically following an independent AVO: this combination
corresponds to the one described at the point IV. Once again
the logical sequence for best exploitation is: secondary AVO
first and then examined AVO.
In view of the described analytical framework the combinations
appear always in couples across the two analytical matrices
representing the related atomic value offerings. Namely, for each
combination I there will be a combination V in the correspondent
matrix that describes the original destination AVO. The same for the
couples II-VI, III-VII and IV-VIII.
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Chapter 4. Value Proposition of the
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It is important to add a clarification on the use of such arrows for
temporal precedencies. The lifecycle of the EPS provides only a logic
order for the different AVOs. Such indication has not universal value
from the business perspective. The arrow instead implies a
necessary business sequence. An example can help clarify this point.
Imagine a company producing equipment for automation. Part of
the production is made of generic automation components that are
manufactured to stock, while the rest of the business is based on
customized automatic machines. In the former case the purchase of
the equipment is not necessarily to be done as consequence of its
creation whereas in the latter situation that is exactly the case.
Therefore while for the former there is no need of including an
arrow, for the latter scenario it must be deployed.
With reference to the Figure 30 one can say that the analyzed
“AVO 1” has a tight coupling and precedence on the “AVO 2” while
it is loosely coupled with the “AVO 3” that, in turn, has a preferable
precedence on the “AVO 1” itself. In view of this, it is important to
remark that while such diagrams provide a graphical visualization
of the mutual influence among AVOs, the specific entity of each
single coupling and precedencies is detailed and discussed during
the analysis itself. In other words, the matrix only provides a
quantitative indication whereas for the qualitative characterization
one must refer to the related description.
Before moving on to the actual analysis a final remark on the
chosen analytical framework is due. In the depicted structure the
orange cells and the plain arrows give strong indication that
constrains the final asset of the EPS value offerings. This is not valid
for the other relationships: yellow cells and dotted arrows offer, in
fact, an optional liaison. This, in turn, opens a set of alternative
solutions, making, to some extent, the value proposition of an EPS a
parametric entity. This occurrence has already been envisaged in
previous sections of this work. The EPS is not yet a fully mature
concept available on the market, thus it would have no scientific
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
value to try constraining the related business models down to
specific details for the implementation. This dissertation has, vice
versa, the inherent value of investigating the different business
scenarios enabled by such technology at its current stage of
maturity. The conceptual outcome is intended as a steering force for
further technological improvements that might lead to actual
applications of the paradigm.
Thirty matrices, each one scrutinized through twenty-nine steps,
produced a lot of results to document. In order to avoid overloading
the reader with non-critical information the following paragraph
introduces exclusively the relevant outcomes of the performed
analysis, i.e. only the AVOs’ couples that yielded a useful
relationship or precedence are discussed.
The following synthetic notation is introduced to distinguish and
correctly address the single AVOs during the forthcoming analysis.
𝐴
Each atomic value offering is characterized by two indexes: (1)
the index that identifies the AVO’s underlying specific element of an
“automatic assembly system based on the evolvable paradigm” and (2) the
index that represents the particular phase of the lifecycle of the
system in which such AVO is active. The values of the indexes are
connected with the actual elements and phases in the subsequent
Table 6 and Table 7.
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Chapter 4. Value Proposition of the
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Element of
the EPS
MAS
Skill
Workflow
Platform
Workstation
Module
Table 6 Summary of the indexes for the EPS elements
Lifecycle
phase
Creation
Purchase
Use
Renewal
Transfer
Table 7 Summary of the indexes for the lifecycle stages
According with this formalism the code 𝐴
identifies the
atomic value proposition connected with the use of the skill. The
analysis is presented in the forthcoming part of the work where the
six EPS elements are introduced and discussed in a specific subparagraph. Each sub-paragraph is, in turn, organized in five sections
that accounts for the five phases in the lifecycle of each element
respectively. Such particular partitioning has only the aim to
enhance the reading experience: all the presented parts are in fact to
be considered as a unique contribution.
The objective of this scrutiny is to separately characterize all the
different atomic value offerings in an exhaustive way. For this
reason the relationships between two AVOs have been reported in
both the related analytical matrices. In concrete, if the analysis of
𝐴
has disclosed a relationship with 𝐴
such a
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
relationship will, of course, appear also in the analysis of the latter.
The small toll to pay for this necessity is the consequent redundancy
in the graphical representation. This redundancy does not affect the
related description: it instead contributes to provide a complete
picture. Each relationship is in fact discussed from the perspective of
the analysed AVO, so even though it appears twice it has not
necessarily the same connotation. This is a further insurance of the
independence of the scrutiny of every couple of atomic value
offerings. Such independence leads, in turn, to exclude all the
previously disclosed relationships for a given AVO. The
consequence is that the analysis is free from chains of relationships
that reach out of the single couples of AVOs in exam at any step of
the work.
Finally, although some specific projects like EUPASS and IDEAS
are often cited as an example throughout this work, it is important
to remark that the analysis has been developed around EPS
contributions not exclusively related with the outcomes of such
projects. Even though they have materially and conceptually
enabled this work with priceless discussions and input, EUPASS
and IDEAS consortiums still are made of specific partners with welldefined business models. Using them as models would have
compromised the general value of this work. This is also the
warranty for the independence of such analysis from the IDEAS predemonstrator system that has been used for the validation of the
results.
The Multi-Agent System is a piece of software that includes all
the basic behaviours that allow controlling the skills provided by
certain pieces of hardware. Conceptually the MAS can be seen as the
operative system of an evolvable assembly system. It is structured
according to a specific architecture that defines the functional agent
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Chapter 4. Value Proposition of the
Evolvable Production System
archetypes and the logic behind their interactions. As an instance of
such a construct, the IDEAS project, among others, has produced a
fully featured Multi-Agent architecture for production systems that
is described in Chapter 2 and detailed in (IDEAS-Deliverable1.4,
2011). The analysis of the AVOs yielded by the MAS is presented
across five sections following the order imposed by the lifecycle, i.e.
from value creation to value transfer through value purchase, use
and renewal. Before each single AVO is analysed, a subtitle
indicating the lifecycle phase under exam is reported to help reading
through the work. This specific sequencing is also applied for all the
other elements introduced in the subsequent paragraphs.
Value Creation
The following Figure 32 shows the graphical results of the
‘s characterization.
𝐴
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 32 The EPS “Elements/Lifecycle” matrix: characterization of
The process of creating the MAS is a critical process for the
development of an EPS: this is reflected by the large amount of
couplings disclosed by the analysis. The first important point of
discussion is the column that identifies the creation of all the
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
elements. As widely discussed in the previous sections of this
dissertation the embodiment of the evolvable paradigm revolves
around the concept of Mechatronic Agent (MA). An MA encompasses
all the EPS elements therefore all the AVOs connected with the
creation of such elements are somehow coupled. Agreements on the
standards to use leave theoretically open the possibility to develop
separately all the elements, therefore the choice of a loose
relationship. In particular the two extreme scenarios are: (1) all the
elements of a MA are created by the same player and (2) different
stakeholders concur to realize each single component of the MA. In
between them hybrid solutions are possible.
The loose link with the 𝐴
is justified by the fact that a
stakeholder that wants to sell a Multi-Agent system produced by
another stakeholder must have a sort of partnership agreement with
the supplier, if not coincide with him. As is enlightened in the
following paragraphs the link between creator and seller is a
constant across all the scrutinized elements. The 𝐴
is loosely
coupled with all the atomic value offerings associated with the use
of any EPS element: the developer of the MAS must in fact account
of the eventual intended use when creating it. The relationships
disclosed so far are loose ones. The only tight coupling unrevealed
for 𝐴
is the one with 𝐴
. A company that creates a
MAS must, in fact, offer also the possibility to update it according
with the changing needs of the customer. Even imagining an opensource scheme, professional users will always tend to trust the firm
that produced the Multi-Agent system in the first place rather than
third parties offering an update of its functionalities.
Finally, given its nature, the 𝐴
neither has significant
precedencies on, nor is to be preceded by other AVOs. The MAS is,
in fact, composed of generic agents able to run different systems. In
other words all the activities connected with linking the MAS to
specific hardware or processes have not this sort of influence on the
creation of the MAS.
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Chapter 4. Value Proposition of the
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Value Purchase
The following Figure 33 exemplifies the results of the analysis on
the 𝐴
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 33 The EPS “Elements/Lifecycle” matrix: characterization of
The process of purchasing a MAS has, per se, no value: this is
because the Multi-Agent system is always to be used with the
related pieces of hardware. Therefore, the purchase of the MAS must
be done concurrently with the concurrent acquisition of platform
and modules. Although it is conceptually possible to decouple the
purchase of HW and MAS, a tight coupling has been deployed here
to underline such a close relationship. Purchasing the MAS has also
a direct influence on the transferring of its value. The conditions for
such a process are in fact determined by the agreement stipulated
between the seller and the end-user. This explains the related loose
links in the diagram. More details on this link are reported in the
specific matrix for the 𝐴
.
The premises for the use of the MAS are established during the
purchase: the requirement of the end-user must be understood and
implemented into the offer. It is important to point out at this point
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
that EPS are instantly deployed before use. This means that the EPS
elements can be, in principle, acquired right before their actual
utilization. Therefore the relationship between purchase and use has
the rigid direction portrayed in the figure. Same goes for renewal
and transfer: the conditions for the implementation of such activities
are established during the purchase phase that must therefore
precede them. Finally, as seen above, the process of purchasing the
MAS is loosely coupled with its creation in order to reflect the
required exchange of information between supplier and seller.
Value Use
All the atomic value offerings connected with the use of EPS
elements, included the 𝐴
, bring value to one stakeholder: the
end-user of the automatic assembly system. This is reflected in the
Figure 34 where all the AVOs in the use column are tightly linked. It
is important to remark that in general the use of an automatic
assembly system brings actual value also to other stakeholders
performing supporting activities such as maintenance or simulation.
Nevertheless, as specified in the premises of this work, those
businesses are out of the scope of this dissertation.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 34 The EPS “Elements/Lifecycle” matrix: characterization of
126
Chapter 4. Value Proposition of the
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Given the nature of a Multi-Agent system, the use of such an
element is the most critical phase in its lifecycle. The particular
operational requirement of the end user must be clear for the
reseller: thus 𝐴
must be related to and preceded by
𝐴
. This, in turn, is reflected on the designer of the MultiAgent platform which exploits 𝐴
. The use of the MAS
provides also valuable feedback that enables a potentially seamless
process of renewal of its functionalities able to cope with the
evolving needs of the buyer. Such a scenario is embodied by the
logical precedence of 𝐴
on 𝐴
. Finally, if the end-user
has the actual ownership of the system he/she can exploit the
residual value. In general the value transfer must always be
temporally and logically subsequent to the intended use: thus the
related strong precedence of 𝐴
on 𝐴
.
Value Renewal
The renewal phase of the MAS is, as for any piece of software,
particularly important. The following Figure 35 presents the results
of the connected 𝐴
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 35 The EPS “Elements/Lifecycle” matrix: characterization of
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The MAS might have to undergo two main kinds of renewal
processes:
1. Small updates aimed at fixing bugs: those needs are usually put
in evidence during the normal use of the software in
combination with all the related elements. This sort of
adjustments justify therefore the mild precedence of all the
atomic value offerings in the column that represents the phase
use of the elements on the 𝐴
. It is interesting to remark at
this point how these small adjustments are not conceptually
similar to the ones performed during the ramp-up phase of a
traditional automatic system. The tuning that system
integrators perform during the ramp-up is aimed at
harmonizing the different component deployed in order to
reach full speed production rate. EPS are, in principle,
conceived and built to work together at 100% of the pace since
the very moment of their deployment, thus the renewal of value
of the MAS is only aimed at continuous improvement.
2. Large updates aimed at including new functionalities,
compatibility with new standards, tools or devices. These
expansions of the original system are driven by factors, such as
product design and marketing analysis, which are external to
the domain of this work.
Both categories can be handled by the supplier of the MAS and
through the reseller when applicable: thus the related relationships
and the mild precedence of 𝐴
on 𝐴
.
Value Transfer
The last examined phase of the lifecycle of the Multi-Agent
system is the transfer of its value. This process is analogous to
liquidating the license for a piece of software. In principle it is
possible to sell a stand-alone MAS, nevertheless transferring the
value of a MAS means, in this domain, that the current user does not
need the whole superior entity “Mechatronic Agent” any more.
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Chapter 4. Value Proposition of the
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While in fact a particular production process ends its lifecycle, other
ones are still active in the company portfolio. Transferring the value
of a generic asset such as the MAS means, thus, that the end-user is
liquidating the whole manufacturing system. In view of this it is
likely that the value of a MAS is transferred only in combination
with the related hardware and atomic skills: thus, as shown in
Figure 36, the 𝐴
is connected with the 𝐴
the
𝐴
and the 𝐴
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 36 The EPS “Elements/Lifecycle” matrix: characterization of
Purchasing the MAS does not automatically mean that the user
also buys the right to transfer the value of it. In a renting agreement
for example the value of the MAS (as well as the one of the
connected HW) can go back to the rental company after its use. In
cases where the end-user purchase the full ownership of the system
then he/she withholds the value coming from transferring it. For
this reasons the cell representing 𝐴
and 𝐴
are
coupled with the one examined and the related activities have a
logical precedence on it.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
As widely discussed in the section where the relevant literature
has been presented the concept of skill is quite wide within the
evolvable paradigm domain. In particular, the skill is the common
denominator, the glue, between the capability of the hardware and
the formal description of the production processes. Skills are
classified in atomic and composite, where the latter are compositions
of atomic skills as well as other lower level composite skills. The
single piece of equipment, or module, holds an atomic skill whereas
more complex pieces of equipment such as a workstation hold
composite skills. The structured set of all the skills necessary to
accomplish the whole given assembly task is the workflow that
therefore represents the higher level of skill composition. Finally, the
skill users are the agents.
The following scrutiny accounts for the multifaceted nature of a
skill. Atomic skills are connected to simple piece of hardware that
provide generic resources such as the platform and the module while
the composite skills can be: process specific when referred to a
workstation or product-specific if coinciding with a workflow. The
effect of such a heterogeneous nature on the AVOs analysed in this
section are clarified and detailed thanks to the specific descriptions
included along the analysis.
Value Creation
In view of the above the 𝐴
can be tightly related to the
creation of each one of the EPS elements that exploits such
constructs as the conceptual building block. The following Figure 37
exemplifies the full graphical characterization of such an atomic
value offering.
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Chapter 4. Value Proposition of the
Evolvable Production System
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 37 The EPS “Elements/Lifecycle” matrix: characterization of
In particular the platform and the modules offer their atomic
skills as resources. Therefore the related skills must be conceived at
the same time, by the same supplier, or by a closely related business
partner. In the same line of reasoning, creating a workstation is the
physical aggregation of modules following the structure of the
composite skill that must be obtained. Finally, even the creation of a
production workflow is a conceptual combination of more and more
complex skills until the highest hierarchical level coinciding with the
composite skill assembly product.
The MAS is the actual user of the skills, so the 𝐴
and the
𝐴
must be exploited sharing the same standards. Renewal of
the skill value is related with the process of skill creation: the initial
structure given to the construct defines, in fact, the possible patterns
of evolution. For example, the atomic skill move in a piston comes
with a range of reach and speed (among the other parameters)
which identifies clear limits for the application.
It is important to remark at this point how the skill creation is
also affected by factors that are not within the scope of this analysis,
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
such as the product design (even in a conceptual state) or the
industrial standards in use for the related process. In conclusion, the
skill creation is a heterogeneous domain which different
stakeholders must engage in for different reasons. Sharing a
standard methodology and formalization language is the necessary
enabler of this approach.
Value Purchase
As for the process of creation of the skill also the processes of
purchase have different ways of generating value according to the
element being referred to. Once again it is important to distinguish
between the atomic skills and the composite skills. While the former
are associated with a generic piece of hardware (platform or
modules) the latter are more process-specific (workstation) or
product-specific (workflow). From a business perspective this means
that the atomic skills must be bundled with the related hardware
and purchased accordingly. The composite ones are instead created
for the sole purpose of accomplishing an already defined job
connected with a specific system or a specific product. This, in turn,
means that even the acquisition of composite skill is concurrent with
the acquisition of the related objects. The following Figure 38 shows,
amongst others, the discussed tight relationships between 𝐴
,
𝐴
, 𝐴
, 𝐴
and 𝐴
.
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Chapter 4. Value Proposition of the
Evolvable Production System
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 38 The EPS “Elements/Lifecycle” matrix: characterization of
The skill purchase is the phase during which the conditions for
their value renewal and value transfer are established: thus the links
𝐴
- 𝐴
and 𝐴
- 𝐴
with the related
precedencies. The arrow that defines the necessary precedence of the
skill purchase process respect to its use is due to one of the most
important characteristic of systems built according to the evolvable
paradigm: resources, both tangible and intangible, are only
deployed when needed. Finally, all the required skills must be
available, at least in a descriptive form, for the stakeholder that
designs the workflow: this relationship is represented through the
link 𝐴
-𝐴
and the related logical precedence of the
former on the latter. This can in fact allow studying different system
solutions and evaluating them.
Value Use
In order to profit from their value proposition, all the elements
must be used concurrently. This is displayed in Figure 39 through
the array of orange relationships in the related column that identifies
the phase of use in the EPS lifecycle. The MAS is the formal user of
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
the skills. In particular the Product Agent, identified in the
workflow, requires a sequence of resources that are provided by the
Coalition Leader Agents deployed in the workstation. The
workstations are aggregations of Modules offering basic Resource
Agents. The necessary logistics between the workstation is offered as
a transport resource by the Transport Agent embodied hereby in the
Platform.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 39 The EPS “Elements/Lifecycle” matrix: characterization of
As already discussed above, the MAS supplier must account for
EPS end-user requirements both when creating and when renewing
the multi-Agent system. The end-user must, in turn, purchase only
the required resources when needed. This explain the relationships
and precedencies related to the 𝐴
, 𝐴
and the
𝐴
.
Workflows and Workstation are, on different levels,
compositions of skills. Therefore their creation enables the use of
composite skills. Hence the links and the related precedencies
among the correspondent atomic value offerings. It is important to
remark that the same precedence is not in place for atomic skills
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Chapter 4. Value Proposition of the
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belonging to platform and modules as they are generic and not
linked to a particular use of the system. Finally, the necessary
precedence of the 𝐴
on the 𝐴
reflects the fact that
parametric adjustments on the skill attributes or layouts are always
dictated by convenience in the use of the skill itself. It is important to
remark that structural modifications of a skill are to be labeled as
creation of a new skill (not renewal of their functionalities), even if
the outcome is the same. Examples of these occurrences are new
workflows or conceptually different workstations as well as
deployment of redundancies in the system.
Value Renewal
Once again the process of renewal of the value for a skill has two
main connotations: (1) general equipment (Modules or Platform)
with related atomic skills; (2) specific aggregations of skills in
product workflows or composite skills underlying production
processes (workstations). In principle any re-composition of the
skills to accommodate process changes has to be seen as a renewal of
the skill’s value. If a skill is redeployed in a new configuration it
implies that the underlying modules, platform, workstations and
workflow are renewing their value. Therefore Figure 40 presents the
tight relationship between the atomic value offerings related to the
renewal phase of the mentioned elements.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 40 The EPS “Elements/Lifecycle” matrix: characterization of
On the one hand the possibility to renew the value of a skill is
established during its creation, when the limits for the
reconfiguration and possible extension of the attributes are
established: the link 𝐴
-𝐴
represents such inherent
feature of the lifecycle of a skill. On the other hand the actual
conditions for renewal are established during the purchase phase
which, in turn, must logically precede it. Finally it is important to
remark that all the atomic value offerings related with the use of
elements such as module, workstation, workflow or platform might
generate input for the renewal of the related skill. Nevertheless such
occurrence is embodied in the relationship between the 𝐴
and
the 𝐴
: the former, in fact, encompasses all the uses from a
skill-centric perspective. In view of this, the use of the skill value has
a strong precedence on its renewal.
Value Transfer
The transfer of the value of a skill depends, once again, on which
kind of skill is under scrutiny. For instance, atomic resource skills
follow the piece of equipment to which they are bundled. Therefore,
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Chapter 4. Value Proposition of the
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as visualized in Figure 41, the links among the 𝐴
and the two
𝐴
and 𝐴
are tight. The same can be stated about the
tight link with the 𝐴
. Although, in fact, the workstations are
usually built for a particular product, therefore their value is not
always easily transferrable to other production, there are cases in
which the particular process delivered by a workstation can be
reutilized as it is. WSs featuring flexible devices such as robots or
feeders based on vision systems are examples of this occurrence.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 41 The EPS “Elements/Lifecycle” matrix: characterization of
Regarding the link with the transfer of the workflow value, this
is mostly a formal liaison. Transferring a workflow means in fact
moving the manufacturing of a product. This can be done in several
ways (see related section below), some of which involve transferring
the whole actual system equipment, and therefore the skills and the
MAS. Finally, in principle all the conditions for transferring a skill
must be clearly established when purchasing it. Thus the weak link
and the logical precedence of the 𝐴
on the 𝐴
.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The workflow construct abstracts the mechatronic agent devoted
to carry out the process that leads to the full realization of the
product: namely the Product Agent (PA). In general a workflow is a
structured set of manufacturing tasks that describes the overall
process of manufacturing a product. In particular, in the domain of
assembly, the workflow is a graph that represents the sequence of
operations necessary to perform the given task. The structure of the
workflow provides also the fundamental indication on the
precedencies among different basic assembly tasks. Traditional
approaches put the stress on workflow design when conceiving a
new automatic system. For instance, in a DAS (dedicated assembly
system) the workflow is a static construct around which the system
itself is generated in a prototypic fashion. Building a DAS means, in
other words, hardwiring the workflow logic in the equipment. A
DAS achieves in this way high efficiency for the given task allowing
economies of scale. FASs (Flexible Assembly Systems) have broadened
the spatial dimension of the problem allowing a mix of products to
be assembled on the same system. The target of such systems was
economies of scope. As (Whitney, 2004) noticed this was, in fact, hardly
achieved due to the complexity of the resulting operative
workflows, and the related inefficiencies in properly handling the
required transitions.
The evolvable paradigm abandons these static approaches and
introduces a dynamic concept of workflow based on the aggregation
of simple building blocks: the skills. The skills are embedded into
modular and rapidly deployable pieces of hardware, therefore the
workflow design is not any more the utmost task in the design and
development of an automatic assembly system. The workflow is no
longer the cause for an automatic system to be created, but it is the result of
how a generic automatic assembly system can perform a given assembly
task. An EPS is not built to assemble a specific product in the same
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Chapter 4. Value Proposition of the
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way a five axes machining center is not conceived to perform just a
single operation.
It is possible to distinguish between two kinds of workflow: (1)
conceptual workflow and (2) detailed workflow. The conceptual
workflow is a generic description of the necessary assembly
processes and is developed in parallel with the product design. The
result is a selection of generic processes and equipment able to
deliver the studied product. In order to thoroughly study the
conceptual workflow, it would therefore be necessary to have
available a knowledge model able to link the design of generic
product features with the required skills, as defined in the evolvable
paradigm domain. Such a construct is far beyond the scope of this
work. This thesis will therefore consider only the detailed workflow
that is, instead, the system-specific graph of the required operations
for a given product. This necessary introduction allows the reader to
move to the actual analysis of the workflow value proposition in an
EPS.
Value Creation
In view of the above, in an EPS system the workflow creation is
the process of putting together specific building blocks called skills.
So creating the workflow must be done right after purchasing all the
required skills and before using them. Such precedence
relationships, among the others, are shown in Figure 42. A
particularly strong link is the one between the 𝐴
and the
𝐴
: this is due to the fact that designing a workflow is, in the
EPS domain, equivalent to designing a composite skill. Thus, to
some extent, such atomic value offerings are coincident.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 42 The EPS “Elements/Lifecycle” matrix: characterization of
The most important chain of relationships that is disclosed by
this analysis is the one among all the moments of the lifecycle of a
workflow. The workflow is a product-specific element of an EAS, so
its entire lifecycle must be handled by the stakeholder that produces
such a product: namely the end-user. It is important to remark once
again that this work refers to workflow as the simple composition of
skills, possibly carried on in a drag and drop fashion. The very
important phase of translating the product features into such skills is
not part of this work for the reasons explained in the previous
paragraph.
Another important set of relationships is the necessary
precedence of the 𝐴
on the 𝐴
along with the preferred
precedencies of the AVOs related to the purchase of platform,
workstations and modules on the same 𝐴
. When conceiving
the workflow it is in fact necessary to have the conceptual
description of all the composing skills, and it is preferable to already
have the availability of the actual hardware that can provide such
skills. Such availability can also be only limited to an electronic
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Chapter 4. Value Proposition of the
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model when designing the workflow. Such a model is in fact
sufficient for the simulation of different working solutions aimed at
picking the most convenient one. Once again, in the evolvable
paradigm approach the actual hardware must be available only at
the moment of using the workflow (see related section value use
below).
The creation of a workflow can be, among others, the trigger for
renewing the value of an already available platform of workstation,
hence the loose links of 𝐴
with the two 𝐴
and 𝐴
.
Finally the MAS is the user of the workflow through the Product
Agent (PA). Therefore the designer of the workflow must comply
with the constraints imposed by the MAS supplier.
Value Purchase
Given the particular connotation given to the concept of
workflow in this work, the 𝐴
is not completely independent
from the previous creation of such a workflow and its eventual use,
renewal and transfer. In particular, at the moment of designing the
workflow the related use is already established and immediately
subsequent. In principle, it is possible to say that the process of
purchasing a workflow cannot yield a stand-alone business model.
Figure 43 presents the described tight relationships and
precedencies among 𝐴
,𝐴
and 𝐴
.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 43 The EPS “Elements/Lifecycle” matrix: characterization of
Finally, as already mentioned, a workflow is the hierarchically
highest composite skill. On a formal level then the process of
purchasing it is therefore equivalent to the process of purchasing a
skill: the tight relationship 𝐴
- 𝐴
represent this
occurrence.
Value Use
The use of the workflow, as seen elsewhere in this analysis, is
tightly coupled with the use of all the elements of an automatic
assembly system conceived according to the evolvable paradigm.
Moreover the lifecycle of a particular workflow, as defined in the
previous sections, is in principle completely in the hands of the
stakeholder that owns the rights of producing the related process.
These two sets of relationships are displayed in Figure 44. The
“cross” formed by the cells that belong to such large sets of tight
links ideally represents a superior value offering that can be
exploited by the end-user of the system.
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Chapter 4. Value Proposition of the
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EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 44 The EPS “Elements/Lifecycle” matrix: characterization of
As discussed above the precedence of the 𝐴
on the
𝐴
is a purely formal way of representing the dependence of
the former on the latter. The use of the workflow implies that the
related platform, workstations and modules are available. Therefore
the 𝐴
,𝐴
and 𝐴
have a logical liaison as well as
a strong precedence on the AVO under scrutiny. The use of the
workflow depends on the structure given by the underlying MAS,
which in turn can be renewed and improved following the
requirements surfaced during such phase: thus the links 𝐴
𝐴
and 𝐴
- 𝐴
where the latter is also
characterized by a precedence of the atomic value offering analysed
hereby on the other one.
A final remark is at this stage important. The workflow is
described through particular aggregations of generic skills
embedded in well specified hardware. On the one hand this means
that other companies, beside the owner of the workflow, might be
theoretically able to implement it. In other words the use of the
workflow is not limited to a company in the same way as the
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
process to machine a particular component can be undertaken by
any subject that owns suitable machine tools. On the other hand the
owner of a particular workflow has no gain in spreading it to other
stakeholder external to its own organization.
Value Renewal
The workflow is, in this work, a complex aggregation of skills
that allows assembling a product. As a construct one can therefore
say that the workflow is product-specific. In view of this, renewing a
workflow means to rearrange the existing skills or add new ones to
deliver the same product. Such a rearrangement does not include
the addition of redundant resources: such resources, in fact, do not
affect the structure of the workflow itself, but only its instantiation
and related performances. Using part of an existing workflow to
generate a workflow for a new product is not classifiable as renewal
of the workflow value, but rather as creation of a new one exploiting
the in house know-how.
The driver of such a process can be the purchase of new
resources or renewal of existing ones. The following Figure 45 shows
the related conceptual links. In particular, the 𝐴
is linked
with the AVOs that underlines the purchase and renewal of
Platform, Workstations and Modules. It is important to remark that
those are means to renew the value of a workflow while the cause
must be identified in new end-user requirements which are outside
the scope of this work.
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Chapter 4. Value Proposition of the
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EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 45 The EPS “Elements/Lifecycle” matrix: characterization of
As explained already in this paragraph, being a product-specific
element, all the phases in the lifecycle of a workflow are tightly
linked: thus the line of tight links among all the value offerings
connected with such a construct. Renewing a workflow coincides
with renewing the related composite skill: this explains the tight
couple between 𝐴
and 𝐴
. It is important to remark that
the seamless renovation of a workflow is a peculiar target of the
evolvable paradigm. Such activity allows in fact a continuous
improvement of the process along with the capability to cope with
unforeseen variations in the working conditions.
Value Transfer
Transferring a workflow means transferring the whole assembly
of a particular product. One example of such a scenario is a
company that is interested in keeping alive a product that another
company is no longer able or willing to produce. In that case the
value of the workflow could be transferred. In traditional system
such occurrence is neither particularly interesting nor relevant: in
case a third company buys the whole automatic production system,
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
not just the workflow. For EAS instead it could be a valuable option
provided that the supplier and the new user have the same generic
evolvable assembly equipment.
Consequently, the following Figure 46 presents the usual links
among all the atomic value propositions related with the workflow,
and the tight links of the AVO under scrutiny with the 𝐴
:a
workflow is conceptually a composite skill.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 46 The EPS “Elements/Lifecycle” matrix: characterization of
An EPS Platform embodies the mechatronic agents that handle
the internal logistics of the automatic assembly system: namely it
provides the logical and physical connections between different
workstations. As all the evolvable pieces of equipment the platform
has a modular architecture that enables scalability and quick
deployment and reconfiguration of the system layout. Moreover it
provides standard interfaces with the workstations and the interoperational storages. The platform must ideally also support the
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Chapter 4. Value Proposition of the
Evolvable Production System
connection of single or multiple I/O devices such as screens and
inspection or diagnostic tools. In order to avoid confusion between
platform modules and production modules (that are analysed in §
4.4.1.6) the formers will be sometimes referred to as platform units
when necessary along the work.
The platform is a key resource for a manufacturing company as
it yields the generic transport skills regardless of the operations that
are actually carried on in the workstations. The platform is a
complex object that binds hard elements with soft ones. This, in turn,
means that from a business perspective it is likely to yield different
value offerings. In view of this, the following analysis is focused on
the hard elements such as actual equipment and controller. Regarding
the necessary soft elements, namely MAS and transport skills: they
have been already characterized separately in the previous sections
and they come into the platform domain through the relationships
disclosed along the incoming scrutiny.
Value Creation
In view of the above, creating a platform coincides conceptually
with creating the related transport skills. For this reason the supplier
of such pieces of hardware must bundle such objects into a unique
offer. The consequent tight relationship between 𝐴
and
𝐴
is displayed in Figure 47.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 47 The EPS “Elements/Lifecycle” matrix: characterization of
The user of the platform’s skills is the Multi-Agent system and in
particular the Transport Agent (TA). The platform must be
compliant with what is created by the MAS supplier (and vice
versa): therefore the link between 𝐴
and 𝐴
. The
workstation and the module must physically and logically connect
with the platform; therefore reciprocal awareness is necessary while
designing such components: this explain the portrayed links
𝐴
-𝐴
and 𝐴
-𝐴
. Finally the initial design
of the platform will establish the boundary for the subsequent
renewal of its value proposition. Limits to product size, typology of
compatible workstations or maximum allowed scalability are
established in this phase and must be well-known to stakeholders
that profit from the 𝐴
.
Value Purchase
Purchasing an EPS platform is conceptually very similar to
purchase a general purpose industrial machine such as multiaxis
machining center or even a robot. Moreover, being a modular asset,
it can be purchased in the required quantity right before start the
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Chapter 4. Value Proposition of the
Evolvable Production System
production of a specific product through the execution of the related
workflow. This explain the logic precedence of the 𝐴
on the
𝐴
and the 𝐴
. At the same time the creator of the
workflow must account for the limit of the platform that therefore
should preferably be available before approaching such task. Such
precedencies are presented in the following Figure 48.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 48 The EPS “Elements/Lifecycle” matrix: characterization of
The modular structure and the open architecture of the platform
offer, in principle, a really good possibility to transfer its value after
use. Leasing or renting such equipment can be a valid alternative to
owning it for a manufacturing company. As will be detailed later in
this dissertation, this opens interesting and almost unprecedented
business perspectives in the automatic assembly domain. The process
of purchasing a platform can be seen as the acquisition of a modular, highly
customizable service rather than a piece of hardware. In relation to this
analysis it is therefore possible to link the 𝐴
and the 𝐴
with a tight liaison and a mild precedence of the former on the latter.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The platform is a mechatronic agent, thus its purchase must be
bundled with the purchase of the related transport skills and
possibly with the related MAS. The latter link does not mean that
MAS and platform must necessarily come in a unique offer from a
single stakeholder, but it rather underlines the need of having a
MAS available when buying a platform. The process of purchasing
the platform also affects the eventual renewal of its value, setting the
constraints for such process. This is then propagated to the
workflow’s possible configurations and, in turn, to the renewal of its
value.
Value Use
The platform provides the system user with the necessary
generic transport skills included in the production workflow. As
envisaged during the previous steps of this analysis, the user of the
platform can therefore profit from this atomic value offering only if
it is joined with the use of all the other EPS elements. Such tight
relationships are displayed in the following Figure 49.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 49 The EPS “Elements/Lifecycle” matrix: characterization of
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Chapter 4. Value Proposition of the
Evolvable Production System
The platform use is supported by the MAS. Thus the supplier of
such a piece of software must account for the related requirement
when creating the MAS, as well as profiting from the eventual user’s
feedback when renewing its value. Finally, the end-user that owns
some platform units might also benefit from the transfer of their
value: see analysis of the related 𝐴
.
Value Renewal
The platform is a modular object therefore the renewal of its
value coincides with a simple reconfiguration process. A
reconfiguration is in principle a much easier task than the creation of
a new system or the re-engineering of a traditional automatic system
based on an integral architecture. This remark embodies, in fact, the
competitive advantage of the evolvable paradigm. The following
Figure 50 describes the results of the analysis of this critical AVO.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 50 The EPS “Elements/Lifecycle” matrix: characterization of
The needs for renewal of the platform value can come from (1) a
change in the required workflows or (2) a change in the production
volumes or mix. The former case (1) represents the scenario in which
the system’s end-user requires an upgrade of the internal logistic to
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
cope with a new production process. In such an occurrence there is a
radical re-organization of the productive flows as well as of the
introduction of new workstations. This explain the links of 𝐴
with the 𝐴
and the 𝐴
. Another scenario that can be
included in case (1) is the need for a renewal of the workflow in term
of processes. This is the case when the same product starts to be
manufactured through a new set of tasks. Such occurrences will of
course affect the layout of the platform.
In the latter case (2) the workflows are the same whereas, for
some operations, the number of workstations changes. For instance,
in a scenario where the volumes go up, the bottle-neck workstation
might be doubled up to face the new demand. This, in turn, imposes
a new layout of the internal logistic, thus a reconfiguration of the
platform. In this case the workstations can also be modified to adapt
to different volumes, higher or lower, hence the loose link among
𝐴
and 𝐴
.
In both cases (1) and (2) the reconfiguration can also entail the
purchase or sell (value transfer) of physical platform modules. The
consequent link of 𝐴
with 𝐴
represents the logical
constraint of buying a platform system that will then enable a
proficient renewal of its value through a quick and seamless
purchase of new platform modules. On the same line of thinking the
link between 𝐴
and 𝐴
embodies the process of profiting
from a reduction of the necessary platform units. Of course such
needs must be kept into account by the supplier of the platform
hardware that must design the platform with the required scalability
needs. Finally, the platform embeds the transport skills, therefore
renewing it also means renewing the related composite skills.
Value Transfer
In view of the description given for the 𝐴
, it is possible to
see the transfer of the value of platform units as analogous to their
purchase. In general two are the envisaged scenarios. If the end-user
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Chapter 4. Value Proposition of the
Evolvable Production System
of the production system buys the right of owning the platform
units then he will be profiting from the transfer of the related value.
In other words the end-user, or a specialized third party, becomes a
seller, thus the link 𝐴
-𝐴
. Vice versa if the platform units
are just bought as a service the 𝐴
and the 𝐴
can be
exploited by the same stakeholder. A wider discussion on the
implications related to both scenarios is included later in this
Chapter. Figure 51 summarizes the results of the analysis for
𝐴
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 51 The EPS “Elements/Lifecycle” matrix: characterization of
The need for transferring the value of the platform might be
generated by a process of renewal of its value: e.g. when scaling
down the system through the liquidation of some platform units.
Thus the mild logic link between 𝐴
and 𝐴
. The atomic
skills associated with the platform units must be transferred
together with the hardware. Finally the 𝐴
and 𝐴
are
logically connected to the platform transfer in view of the obligatory
needs of a suitable MAS to run the platform in the first place.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Assembly processes require complex combinations of atomic
skills in order to be performed. An immediate example is the
composite skill Pick&Place that can be obtained combining the basic
move skill of a robot with the grasp skill of a gripper. In order to
enable a complex skills such as assembly component X many atomic
and lower level composite skills are needed: feed, orient, move to
position are only some of them. Building a workstation is therefore
the process of bringing such composite skills to life through the logical and
physical aggregation of lower level skills.
The composition of more basic skills imposes some logical and
physical constraints on the workstation that therefore can’t be
considered as general purpose equipment like other elements of an
EPS (platform and modules). Unlike the workflow though, a
workstation is not a product-specific object either. Given its nature a
workstation is therefore a process-specific object. The composite skill
underlying a particular WS is customized for a particular process so,
in line of principle, any production that requires that process can
benefit from the workstation. The only limitation to such an
occurrence comes from the features of the WS’s composite skill itself.
As all the skills the composite skill underlying a workstation is
characterized by a set of functional attributes, each one labeled with
a range of possible values. Speed, working volume, precision, and
accuracy are example of such attributes.
The workstation is a mechatronic agent composed of hardware,
namely the equipment and controller of the underlying modules,
and software, i.e. resource agents, coalition leader agent and related
skills. As for the platform, the analysis aimed at disclosing the value
proposition of such complex construct must account for these
heterogeneous elements. Therefore the following scrutiny will focus
directly on the hard parts of the workstation. The soft components
have been already treated separately in the previous paragraphs:
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Chapter 4. Value Proposition of the
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they will be put in relation with the WS domain through the
deployed couples and relationships among specific AVOs.
Value Creation
Creating a workstation coincides with producing a composite
skill, thus the 𝐴
and the 𝐴
are tightly linked. For the
same reason the 𝐴
and the 𝐴
have a mutual influence
further characterized by a logical precedence of the former on the
latter. The following Figure 52 presents these and the other
relationships found through the analysis of 𝐴
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 52 The EPS “Elements/Lifecycle” matrix: characterization of
A new workstation must be created according to the constraints,
imposed when the related platform and Multi-Agent System are
designed. Physical and logical interfaces are among such
restrictions. The building block of a workstation are the modules
therefore the 𝐴
has an influence on the atomic value offering
under scrutiny.
The creation of a WS is, in the evolvable paradigm domain, an
activity connected with several other phases in the lifecycle of such
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
an object. First of all, being a process-specific construct, the WS is
created as a consequence of a specific need, therefore right before its
use. The end-user is, in other words, the direct customer of such
AVO. This means also that the creation precedes logically the
purchase and that the two related 𝐴
and 𝐴
are tightly
linked. The renewal of the workstation value consists of reconfiguring the attributes of station for new similar processes. While
the different configurations can be handled by the end-user, the
creator has to set the limits for such process in terms of allowed
ranges for the value of such attributes. Consequently the 𝐴
and the 𝐴
are on some extent exploited by the same
stakeholder that offers a parametric workstation rather than a static
one.
Value Purchase
The purchase of the workstation does not really generate a fully
independent AVO as it is more of a compulsory intermediate phase
between its creation and use. This is reflected by the necessary chain
of precedencies between the related AVOs. Such relationships are
displayed in Figure 53 together with the other results of this
scrutiny. In spite of this strict dependence on other AVOs, as for the
analogous analysis of the workflow, the scrutiny of this phase in the
lifecycle of the WS allows disclosing interesting aspect of this
element.
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Chapter 4. Value Proposition of the
Evolvable Production System
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 53 The EPS “Elements/Lifecycle” matrix: characterization of
Beside the already identified chain of precedencies the 𝐴
is tightly coupled with the 𝐴
: the design of a workstation is
triggered by the end-user therefore the creator is likely to supply
directly the result to the buyer. This explain also the logic link
between 𝐴
and 𝐴
The purchase of the system is also
the moment in which the condition for eventual transferring of the
value of a workstation is established: therefore the logic precedence
and link with the related 𝐴
. The same reasoning applies for
the single modules that compose the workstation.
The purchase of a new WS can be required for an overall
renewal of the system functionalities: therefore the 𝐴
can
sometimes been combined with the 𝐴
and the 𝐴
for
such purpose. The acquisition of the workstation is a fundamental
input for the creation and the use of the related workflow. In view of
this the 𝐴
must be fulfilled preferably before approaching the
workflow design. Concerning the workflow use, such a process can
only take place after all the related WS have been purchased. Finally,
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
purchasing a WS is logically coincident with purchasing the inherent
composite skill, thus the tight link between 𝐴
and 𝐴
.
Value Use
A workstation is designed for a particular process; therefore the
use of such assets is logically following the purchase and it gives the
necessary constraints for the design phase. The described
relationships between
𝐴
, 𝐴
and 𝐴
are
displayed in the following Figure 54.
In view of the above the user can also claim the residual value of
the workstation at the end of the required use.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 54 The EPS “Elements/Lifecycle” matrix: characterization of
The use of a WS, among other things, can generate the needs for
a renewal of the value of such asset thus the couple 𝐴
𝐴
. The same can be stated about the renewal of the MAS
value: problems surfaced during the use of a workstation might be
source of information to tweak the Multi-Agent System. The
envisaged reactive update of the MAS justifies the logical
precedence of 𝐴
on 𝐴
. In general the designer of the
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Chapter 4. Value Proposition of the
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MAS should account for the intended use of all the other elements,
included the WS. Finally, once again the analysis shows how all the
AVOs related with the use of the evolvable system elements concur
in the value proposition that such system offers to an end-user.
Value Renewal
In the evolvable paradigm domain renewing the value of the
workstation consists of reconfiguring the attributes underlining the
WS composite skill in order to achieve a new instantiation of the
related process. This practice has two implications: (1) the designer
of the workstation sets the limit of such reconfiguration while
establishing the ranges of the attributes related with the composite
skill offered by the WS and (2) the end-user performs the actual
reconfiguration through the simple resetting of the value for the
relevant attributes for the new required process. The former
occurrence (1) puts in evidence the links between 𝐴
and
𝐴
whereas the latter (2) embodies the tight logical connection
of 𝐴
with 𝐴
. Figure 55 introduces the described
relationships along with the other ones identified throughout this
work.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 55 The EPS “Elements/Lifecycle” matrix: characterization of
Renewal of a workstation coincides with reconfiguration of the
related composite skill, consequently the correspondent AVOs result
in a tight link. A general renewal of the system value might require a
concurrent renewal of the single values of workflow, platform and
workstations. This in turn generates the link among 𝐴
,𝐴
and 𝐴
. The creation of a new workflow might
require, among other things, the reconfiguration (renewal) of one or
more WSs, thus the link between 𝐴
and 𝐴
Value Transfer
Given its nature of process-specific element the workstation
value transfer is possible only as long as the physical embodiment of
the composite skill associated with the WS is still able to yield useful
sub-processes for evolving workflows. The logic tight link between
𝐴
and 𝐴
is represented in Figure 56 below.
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Chapter 4. Value Proposition of the
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EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 56 The EPS “Elements/Lifecycle” matrix: characterization of
The 𝐴
has not a significant appeal as stand-alone value
proposition. Two are the possible scenarios for a proficient
exploitation:
1. The WS is leased to the end-user. The supplier, that is likely to
coincide with the designer, withholds the right to re-lease it after
the contract with the former end-user expires. In this case the WS
has to be seen as general purpose equipment. Workstations that
are designed for very specific or even customized processes are
not likely to have high value at the end of their use.
2. The WS belongs to the end-user which can, after using it, decide
to transfer the related value. One important remark about the
strategic importance of workstations for an end-user is necessary
at this point. Very often a workstation delivers a particular
process that is part of the core competencies of a firm. In these
cases the scenario number two is for sure a better approximation
of the reality, and the potential value of transferring the
workstation as it is, is of course not exploited.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The scenario number one is represented by the link and the
logical precedence between 𝐴
and 𝐴
whereas the
scenario number two is embodied in the couple between 𝐴
and 𝐴
. Finally the workstation can be liquidated as they are
or as single modules, thus the last link of the diagram above:
𝐴
-𝐴
.
In the evolvable paradigm domain a mechatronic agent that
provides a skill that is not further decomposable is called module. In
other words such construct is the hardware and software
embodiment of an atomic skill. Modules are composed in
workstations which, in turn, deliver more complex capabilities
called composite skills.
As for the platform analysis, the following scrutiny is focused on
the hardware part of the module: actual equipment and controller.
From the business perspective in fact, a mechatronic agent is a
complex object which the realization might involve more than one
stakeholder. The following work accounts for this combination of
the hardware with soft elements, such as MAS and skills, through
the implemented and described links among the related AVOs.
Value Creation
A module is an intelligent and general purpose piece of production
equipment which is used as building block to create automatic
system. Given this connotation it is correct to say that the atomic
value offering connected with the creation of such an object can be
exploited quite independently from the intended use. The
underlying skill must be defined according to the process
requirement, which therefore affect only indirectly the hardware
design phase. In other words the supplier of a module is driven by
the process, or skill, that must be delivered, rather than by a
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Chapter 4. Value Proposition of the
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particular product. This tight relationship is presented in the next
Figure 57 along with the other results of this analysis.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 57 The EPS “Elements/Lifecycle” matrix: characterization of
The user of a module’s skill is the related resource agent. Thus
the 𝐴
must be delivered in logical conjunction with the
𝐴
. Modules must also be compatible with the platform that
supports them: this requires a mutual awareness between the
suppliers of such elements. Finally, the designer of a module
imposes on it functional constraints which affect, in turn, the
eventual capability of renewing the module’s value for the end-user.
This explain the logical link between 𝐴
and 𝐴
.
Value Purchase
The process of purchasing a module is in principle very similar
to the one described for the platform. While the platform units are
composed to provide the necessary internal logistic network, the
modules are used as building block for the workstations that are
meant to deliver a particular workflow. The 𝐴
is therefore
logically related with the creation of the superior workstation
(𝐴
) as well as the target workflow (𝐴
). The module
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
must be available in a soft form when the related workflow is
conceived, and in its complete embodiment when it is used. Thus
the light precedence on 𝐴
and the strong one on 𝐴
.
These precedencies reflect the capability of automatic systems based
on the evolvable paradigm of delay the actual deployment of the
hardware to the last minute before production. Purchase of new
modules is among the enabler of the value renewal of a workflow:
thus the link 𝐴
-𝐴
. Figure 58 introduces the discussed
relationship as well as the other ones presented below.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 58 The EPS “Elements/Lifecycle” matrix: characterization of
The modules can enter in the workflow directly, but more often
they are introduced through workstations. The related chain of
relationship has been omitted here in order to frame better the
specific AVO. Nevertheless all the links necessary to represent such
feature of an evolvable system are showed in the previous specific
sections of the analysis.
The acquisition and consequent exploitation of a full
mechatronic agent implies the availability of the hardware and of
the related software. For this reason, according with the assumption
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Chapter 4. Value Proposition of the
Evolvable Production System
of this analysis, the 𝐴
must be bundled with the 𝐴
and the 𝐴
. As usual the end-user of the system, which
exploits the 𝐴
is the source of requirement that must be
matched by the seller. Other important link is among the 𝐴
and 𝐴
: the conditions for such value offering to be exploited
can be established during the purchase.
Finally, in view of the generic purpose of evolvable production
modules, they hold a significant value throughout different cycle of
use. The process of purchase them is therefore analogous to the
transfer of their value after use. This is embodied in the tight
relationship and precedence of 𝐴
on 𝐴
. The
interesting impact of such feature of an evolvable system on the
business level is detailed later in this work.
Value Use
The end-user of the evolvable automatic assembly system is the
beneficiary of all the AVOs connected with the use of the single
element. Therefore, as shown in Figure 59, once again the cells in the
column that identifies such phase in the system lifecycle are fully
and tightly interconnected.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 59 The EPS “Elements/Lifecycle” matrix: characterization of
The intended use of the modules can be source of input for the
creation of the MAS whereas the actual use can suggest or require
eventual renewal of the MAS value. The latter scenario is
represented also through the precedence of 𝐴
on 𝐴
.
Such precedence is not strong because, as always in this case, the
two AVOs are in principle independent from each other. The
𝐴
is also connected with the 𝐴
: this represent the
normal exchange of information between supplier and buyer.
According with the actual ownership of the modules, the end-user
might be able to exploit the returning value coming from their
transfer, thus the relationship between 𝐴
on 𝐴
.
Finally it is important to remark that the modules are most of the
time used in the system through their composition in specific
workstations. For this reason a stakeholder that builds the
workstation is also somehow using the modules. This intermediate
use is not accounted in this section of the analysis, but it vividly
emerges in the section devoted to the WS’s scrutiny.
Value Renewal
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Chapter 4. Value Proposition of the
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The renewal of the value of a module is logically coincident with
the renewal of the value of the underlying atomic skill: the analysis
has in fact linked tightly the related 𝐴
and 𝐴
. Figure 60
portrays the outcome of the analysis for such 𝐴
. Module
value renewal can be necessary when the 𝐴
is exploited, thus
the displayed relationship.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 60 The EPS “Elements/Lifecycle” matrix: characterization of
The technical boundaries for the renewal of a module value are
established during the design of the module and negotiated during
its purchase: 𝐴
and 𝐴
are in connection with the
analized AVO.
Value Transfer
Given their nature of general purpose objects the modules keep
their value throughout more productive cycles: this makes the value
transfer process very similar to the initial purchase of the module.
As for the platform such occurrence generates a tight relationship
among the related 𝐴
and 𝐴
with a logical precedence
of the latter on the former. Figure 61 shows these relationships along
with the other ones emerged during the analysis.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 61 The EPS “Elements/Lifecycle” matrix: characterization of
Transferring a module means transferring the related
mechatronic agent including the specific skill: consequently
𝐴
and 𝐴
belong to the same higher level value
offering. Regarding the MAS it can be transferred together with the
module or purchased separately, thus 𝐴
is coupled with
𝐴
and 𝐴
. Modules are, most of the time, part of a
superior workstation: this, in turn, lead to possible business scenario
where the 𝐴
is connected with purchase or transfer of WSs.
Finally the current user might have some sort of ownership of the
module, therefore he can participate in the exploitation of the value
generated as consequence of its transfer: in view of this the link
𝐴
-𝐴
.
The analysis presented in the previous paragraphs provides
many insights for a structured understanding and consequent
classification of the vast and heterogeneous value proposition
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Chapter 4. Value Proposition of the
Evolvable Production System
associated with an automatic evolvable assembly system. In relation
with the chosen methodology, on the one hand, the overfragmentation of the general value proposition of an EPS allowed
studying smaller problems from a multiple perspective; on the other
hand this arbitrary atomization of the value offering has no direct
correspondence with meaningful business claims. Thus, after
introducing the necessary supporting concepts, this paragraph will
present and discuss the relevant patterns that can define a set of
significant EPS value offering.
The choice of the word pattern reflects the particular background
of this dissertation. Even though the evolvable paradigm has been
already proven valid at pre-industrial level, such approach is still far
from the full scale industrial application. The assumption
underlying this work is that such predicament is due to the inherent
disruptiveness carried by evolvable production technology in
comparison with traditional embodiments of industrial automation.
This, in turn, prevents automation users from fully understanding
the potential of such technology, and, it consequently discourages
investments aimed at bringing such an approach at shop-floor level.
Regardless of the actual causes, the consequence of the lack of
technological maturity of EPS on this analysis is that such systems are
not eligible for a full and detailed characterization of the value offerings.
Achieving such purpose is not only impossible but also not logically
correct: a meaningful characterization of the EPS value offerings
must account for all the possible developments of such a broadly
defined concept. Thus the EPS value propositions presented hereby
are to be seen as possible patterns which conceptually encompass
future industrial implementations.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The necessary first step in defining any value proposition is to
identify the generic target customer of such offer. An automatic
assembly installation is a very complex system that therefore yields
a wide set of value offerings which, in turn, addresses different
kinds of stakeholders. In particular, as already mentioned and
briefly discussed across the matrices’ descriptions, the atomic value
offerings of the EPS elements can be classified in three general
clusters according with their intended domain of exploitation (see
Figure 62). In detail:


170
Product-oriented elements. Such category features the
constructs which refer to only to a particular product. This is
the case for example of specific fixtures, grippers, feeding
equipment or other tools as well as programs for the
machines. Among the EPS elements analyzed the only
product-oriented one is the workflow. It is important to
remark that this does not mean that the other productoriented elements are not part of the EPS: such elements have
been left out of this work because they don’t introduce any
technological or business disruptiveness with traditional
systems.
Process-oriented elements. In this work a process is achieved
through a particular composition of skills: thus composite
skills are, in principle, process-oriented elements. The
workflow that delivers a product is a sequence of welldefined processes, each one delivered through a specific
workstation. In the evolvable paradigm domain, as well as in
a flexible assembly system, the workstations are built to
perform a parametric process. In particular, it is possible to
reprogram the attributes of the composite skill underlying
Chapter 4. Value Proposition of the
Evolvable Production System

such workstation and use it on another similar production.
Composite transport skills, obtained through composition of
platforms units, belong to this cluster as well.
General Purpose elements. This category encompasses all the
elements that can be used in any production system. This is
the case of the Multi-Agent system, which the composing
agents are analogous to an operative system for generic
computational units. Among the skills, the atomic one
belongs to this class. The concept of atomic skill is also useful
to describe a subset of the general purpose elements: the skilloriented ones. In particular the platform units and the
modules are designed to deliver a particular transport of
manufacturing skill respectively. Conceptually this makes
the skill-oriented objects very similar to the process-oriented
ones, with the important difference that they are logically
placed at a lower level of granularity. In fact, this makes
them the generic building blocks for superior processoriented entities: the composite skill.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
General Purpose
Mechatronic Agents
Product Agent
Machine
Resorce
Agent
Coalition
Leader
Agent
Skills
Transport
System
Agent
Skills
Agent to
Machine
Interface
Modules
Modules
Modules
Modules
Skills
Skills
Process
Work
Stations
Product
Workflow
Task
Task
Task
Task
Skills
Skills
Skills
Skills
Modular Platform
Composite Skill
Skills
Figure 62 Domains of exploitation for the EPS elements
The product-oriented objects carry value only in relation with
the specific end-user that manufactures the associated product. On
the other hand the process-oriented constructs are, in principle,
targeting the wider field of application connected with a particular
process: such an element is potentially relevant for all the business
subjects involved in conceiving and delivering the specific process
itself. Finally the general purpose elements are built to fulfill the
needs of a wider range of customers. The outstanding consequence
of such a business condition is that, in this category, the end-users
do not play the main role for the elements’ development: the
different phases in the lifecycle of such objects are, in fact,
conceptually independent of one another rather than subordinates to
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Chapter 4. Value Proposition of the
Evolvable Production System
a specific implementation. This, in turn, leads to a very fragmented
exploitation scenario, where multiple stakeholders can profit from
such general purpose elements.
The supporting concepts introduced in this section set the scene
for the forthcoming paragraph where the atomic value offerings of
an EPS will be aggregated in a series of conceptual propositions for
value which can, in turn, support the business claims of the
stakeholders of such system.
This paragraph is divided into seven sections. The first six
introduce and discuss the independent aggregated value offering
(hence also VO) of an EPS and allocate them on a set of conceptual
stakeholders while the seventh summarizes and brings together the
previous finding through a unified overview. The names given to
such stakeholders at this stage are anticipated at the beginning of
each related section and discussed throughout the following text.
It is important, before approaching the next sections, to add a
fundamental remark. The aim of this paragraph is not to identify the
actual business subjects for any EPS: once again, this would be
impossible at this stage of maturity of the technology, as well as
conceptually wrong. The actual embodiment of the necessary set of
business models depends, in fact, on particular conditions and
opportunities that are out of the scope of this analysis. In some cases
a single firm might for example exploit more than one of the value
offerings individuated while in other cases more organizations’
expertise could be employed for profiting just from a single value
offering. Thus the forthcoming sections are simply aimed at
describing the independent value offerings that EPS proposes. In
consequence, even if the following VOs are associated with possible
stakeholders, such notation is only aimed at simplifying the reading
process.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
As for any assembly system, the ultimate purpose of an EAS is to
perform a specific mounting task that is beneficial for a particular
firm in a given moment. In order to do so all the elements of such
installations must be used concurrently and according with the
requirement of this aforementioned end-user, which therefore can be
considered as the main stakeholder of the system. In consequence of
that, and with reference to the previously discussed characterization
of the EPSs, one can say that the atomic value offerings related to the
use of each single EPS element must be conceptually bundled into
the target value proposition that such system has to offer to the enduser. Such an assumption is adequate enough for the purpose of this
dissertation but it does not mean that all the potential value
connected with the use of an EPS is limited to manufacture a
particular object. In order to use any automatic production system
some supporting activities such as maintenance or logistics are
required. In some cases the aforementioned tasks might be
outsourced by the end-user to different business partners.
The value offering that an evolvable production system provides
for the user (hence
) reaches beyond the simple
exploitation of the use phase in the lifecycle of its elements. In detail,
Figure 63 represents a synthetic graphical overview on the
aggregated value offering of an EPS for its end-user.
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Chapter 4. Value Proposition of the
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EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 63 Aggregated value offering of an EPS for the end-user:
The entire set of atomic value offerings connected with the
workflow have been allocated on
. The reason for that lies
in the fact that such element is a product-oriented construct which
consequently carries value only for that specific production. Besides,
once the system is deployed the configuration and reconfiguration
of the workflow is, in principle, an easy drag&drop like task which is
manageable also for company with scarce automation expertise.
Ultimately the workflow might embed some of the core
competencies of the firm which thus has all the strategic interest in
keeping it inside. In EPS domain a workflow is conceptually
analogous to the highest composition of the skill. This, in turn,
means that the end-user plays a role also for the atomic value
offerings related to skill. In detail 𝐴
and 𝐴
belongs in
part to the
that in fact creates the workflow and renew its
value. 𝐴
and 𝐴
have been left outside of the
aggregated value offering for the end-used because in view of the
performed analysis they are not significant when the reference skill
is the workflow. In fact, the former embodies the simple
transmission within a firm of the created workflow to the shop-floor
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
whereas the latter would basically coincide with giving away
precious process know-how.
Analogously to the renewal of the workflow value, an EPS enduser is also partially involved in the renewal of the value of
modules, platform and workstations. Renewing the value of such
construct coincides, in fact, with tweaking the values of the skills
attributes in order to allow the equipment to perform a new similar
process. This, in case of switching production is on some extent a
task for the manufacturing form that uses the system. It is important
to remark that the 𝐴
,𝐴
and 𝐴
are shared with
the suppliers of such element, which are in fact establishing during
the creation phase the boundaries of such value renewals.
As discussed in the previous paragraph, the workstations are
process-oriented elements, thus they are, in principle, not connected
to a specific production. Nevertheless, the actual workstations’
embodiments can constrain the implementation of the underlying
process to a point where it loses the generality. In other words, if the
process needs to be, on some extents, tailor made for the current
production, then the capability of implementing it on other
applications may result compromised. In this scenario the
workstations value ends up being analogous to the value of a
product-oriented object: thus in many cases the end-user is the
stakeholder that can profit from all the phases of the lifecycle of a
workstation. Strategic reasons might enforce this scenario. A
workstation can, in some cases, perform a process that belongs to the
core competencies of a firm and it is therefore the key to the
competitive advantage of such organization. In this case, the enduser will most likely make sure to keep in house the fulfillment of all
the activities aimed at exploiting the value of such installations
throughout the entire related lifecycle. On the other hand, designing
automation might be a very demanding task for manufacturing
companies. This leads directly to describe the next envisaged
stakeholder of an EPS.
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Chapter 4. Value Proposition of the
Evolvable Production System
Often the end-users which require automatic production systems
have no gain in owning all the necessary expertise connected with
such installations within their organization charts. Thus such firms
must, even in the EPS domain, outsource the development of the
workstation to specialized business partners. In view of this, figures
63 and 64 show how the end-user share the exploitation of 𝐴
,
𝐴
,𝐴
and 𝐴
with another potential stakeholder
named, hereby, workstation supplier. In general, the more a WS is
complex the more the expertise of such business partner is required.
The resulting aggregated value offering is visually presented in the
following Figure 64 and hence indicated with the acronym
.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 64 Aggregated value offering for of an EPS the workstation supplier:
A final remark on the workstation development is now
necessary to understand the disruptiveness of the evolvable
paradigm if compared to the traditional approaches. As discussed
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
above, automation is a very knowledge intensive domain: end-users
of which the core competencies are not directly related to such fields
will always need to hire internal or external expertise specifically
devoted to designing and setting up their automatic production
systems. This regardless of the paradigm adopted. The point of
rupture with the past introduced by the evolvable production
concept is that it moves away from the current Engineer to Order
practice of designing automation. Alternatively, EPS proposes an
approach based on the simple aggregation and configuration of
standard hard and soft modular entities. I addiction to that, the
current technological developments tend towards a more and more
autonomous way of handling such configuration which, in turn,
targets the plug and produce concept.
In the domain of this dissertation a MAS is a piece of software
that provides the basic behaviors for an effective exploitation of the
skills as well as the structure for a rational interaction among them.
The evolvable paradigm endorses the use of a generic Multi-Agent
platform able to cope with any kind of piece of hardware and
process through to the related skills. Such premises lead to a very
open value offering related to this element. Once the standards for
the definition of the skills and the interfacing with the hardware are
known the MAS can be created independently. Figure 65 presents
the aggregate value offering that a Multi-Agent System supplier can
target.
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Chapter 4. Value Proposition of the
Evolvable Production System
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 65 Aggregated value offering for of an EPS the workstation supplier:
Beside the fundamental 𝐴
the
includes
also the 𝐴
. This reflects the typical business set up where a
company that creates pieces of software withholds the rights and
duty to update them in relation with: new standards, new customer
requirement, quality improvement, legal requirement and so on.
Finally, the MAS is part of the EPS superior entity Mechatronic
Agent together with the skills and the actual hardware (equipment
and controller). This in turn forces the supplier of such mechatronic
agents to bundle their product with a MAS or with compatibility to
a given MAS. Such practice is analogous to what happens in the
computer markets where the machines are usually sold together
with an operative system. For this reasons, even if supplying the
MAS is in principle an independent VO, it might be often aptly
aggregated with other value offerings including all the elements of a
mechatronic agent.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The evolvable assembly system internal logistic requirements are
handled through the aggregation of several kinds of simple logic
units which provide the necessary atomic skills connected with the
transport domain. The resulting modular platform connects all the
workstations currently active in the system through a set of specific
composite skills aptly generated as result of the aforementioned
aggregation. Given its nature of general purpose element and
provided that standards related to the different application are
available and implemented the value offered by platform creation
can be exploited independently from the temporally subsequent
phases in its lifecycle. In view of this, the following Figure 66
represents the consequent value offering for a fictional stakeholder
called hereby platform supplier.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 66 Aggregated value offering for of an EPS the workstation supplier:
Through the design and development activities the platform
supplier not only targets the actual creation of the platform
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Chapter 4. Value Proposition of the
Evolvable Production System
(𝐴
) but he also establishes the boundaries for the renewal of
its value. Namely the allowed values for the attributes of the
transport skills originate in the creation phase. As seen in the related
section, such value ranges are then maneuvered by the end-user to
complete the exploitation of 𝐴
.
Although from the
mechanical point of view the platform is conceptually analogous to
the traditional equivalent automation equipment there is an
important difference: while the traditional equipment provides only
generic I/Os that must be afterward hardwired in a strictly defined
operative logic, the EPS solution comes with the required skills
available for the MAS right after the connection. This plug and
produce approach explain why
includes also part of the
𝐴
and 𝐴
.
In the same way platform units are aggregated to create the
system that provide the necessary internal logistic to an EPS, the
modules are combined into the workstations that seats in the hubs of
such network. Consequently the suppliers of the modules can, in
principle, exploit a very similar value offering. Figure 67 introduces
which, in turn, features the whole 𝐴
and a
share of 𝐴
along with the related parts of 𝐴
and
𝐴
.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 67 Aggregated value offering for of an EPS the workstation supplier:
Even though the aggregated value propositions for platform and
module suppliers are conceptually equivalent, the underlying
business processes are on some extent different. While in fact the
platform has a relatively homogeneous task throughout different
instantiation of an EPS, namely transport object from a workstation
to another, this is not the case for the modules. The requirement for
different workstations can significantly vary. The consequence is
that while a single firm can easily cope with all the possible
requirements in term of designing platform units, for the modules a
larger pool of expertise is likely to be necessary.
The innovative way of engineering the system introduced by the
evolvable paradigm extends the value of the general purpose
equipment beyond a single productive cycle. Automatic assembly
systems are no longer prototypic installations which the reengineering costs are, in some extreme cases, higher than the costs of
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Chapter 4. Value Proposition of the
Evolvable Production System
building a new system from scratch: they rather are rapidly
deployable and re-deployable sets of standard components
(mechatronic agents) that therefore keep a high value throughout
different production cycles. The transfer of the value at the end of
each use is fundamental in EPS, while in traditional high speed
automation was basically identifiable in the cost of dismissing the
system and when possible cash from legacy components.
In view of this the atomic value offerings connected to the value
purchase and transfer of all the general purpose elements of an EPS
can be aggregated. The resulting superior value offering can be
targeted by a Mechatronic Agent provider. The following Figure 68
represents such
. Providing a mechatronic agent does
not necessarily mean the transfer of the related ownership. (Weill et
al., 2005) suggests that, when possible, business models based on
leasing are much more efficient. The conclusion of this study is in
fact that “selling the right to use assets is more profitable and more highly
valued by the market than selling ownership of asserts”. This input along
with all the others disclosed along this Chapter will be further
elaborated in the following Chapter 5 which deals with the process
of creating and capturing the value proposition described hereby.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 68 Aggregated value offering for of an EPS the Mechatronic agent
provider:
One final important remark: regardless if the ownership of the
elements has been fully acquired or rented by the end-user, the
transfer of its value is always to be handled by a stakeholder that has
core competencies in the domain of selling. Thus the actual value
generated by the transfer of EPS equipment is in fact coincident to
the one obtained through the subsequent cycle of purchase. This last
comment will be re-introduced and detailed in the forthcoming
Chapter 5.
From thirty very general atomic value offering, the analysis
performed in this chapter has extrapolated six meaningful
independent value offerings: the following Figure 69 shows how
such VO covers the whole value proposition of an EPS as defined in
this work. The portrayed value offerings refers to a concept which is
still not fully developed from the technological point of view: they
have to be seen as an intermediate step toward the correct definition
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Chapter 4. Value Proposition of the
Evolvable Production System
of the EPS value proposition that will follow the full industrial
embodiment of the paradigm.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 69 Summary of the relevant patterns for the EPS value offerings
Figure 69 is the conceptual closure of the first part of this work
which was aimed at defining the innovative value proposition of
EPS system in relation to the one of a traditional automatic assembly
system. Given such purpose, the elements which were not seen as
disruptive of the current practice have been left out of this scrutiny.
The independence of the VO individuated is only achievable if
concise standards for interfacing the single elements are clearly
defined and accepted by all the stakeholders of the automatic
assembly system. The share of such interfaces, that is deemed
relevant for this analysis, will be conceptually introduced across the
different sections of the forthcoming Chapter 5.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
This Chapter introduces a newly conceived bottom-up approach
for describing the value proposition of complex objects. Such
approach is described through a specific application in the domain
of this thesis: the automatic assembly systems based on the
evolvable paradigm (in brief EPS). The method consists of three
steps:
(1) identification of the lowest level value offerings (named
atomic value offerings or just AVOs) of the examined object,
(2) characterization of such atomic value offerings in relationship
with each other,
(3) aggregation of the AVOs in a superior set of value offerings
(VOs) which are exploitable from a business perspective.
In detail step (1) consists of a two dimensional analysis aimed at
identifying all the elements of the object which theoretically carry an
independent value proposition (spatial dimension) and plot them in
a matrix with the five phases in their lifecycles (temporal dimension)
which can, in turn, generate value: creation, purchase, use, renewal
and transfer. In relation with the EPSs such scrutiny has disclosed
six elements: Multi-Agent System, Skill, Workflow, Platform,
Workstation and Module. This makes for a total pool of thirty
atomic value offerings. Step (2) is carried out through a separate
study of each couple of AVOs aimed at disclosing relationships and
precedencies between the related activities. Step (3) puts together
through the lens of the input generated during step (2) all the AVO
which are strictly related one another. The EPS characterization and
aggregation resulted in six independent value offerings. Such VOs
are further investigated in Chapter 5 where the mechanisms for
creating and capturing the related value will be detailed.
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Chapter 4. Value Proposition of the
Evolvable Production System
Finally, after the identification of the EPS elements (part of step
1), a short characterization of the cost associated with such systems
along with a specific tool for the stepwise approach to automation
fostered by the evolvable paradigm have been included with the aim
of helping the reader to get familiar with this new way of
engineering the system.
187
The work presented in this chapter has two aims: (1) presenting
a suitable working definition of business model which is
consequently exploited for (2) describing such a concept with
reference to an evolvable production system. The necessary input to
achieve the former objective is the reviewed literature and the
related supporting construct which emerged. Thus the first part of
this chapter returns to the findings of the §2.5 and develops them
through the lens of the problem definition. The value proposition is
the maieutical 1 concept behind a business model, which, in turn,
must describe how such value can be created and exploited. The
latter objective is therefore a direct product of both the outcome of
Chapter 4 and of the business model archetypes presented in the
first part of this chapter. Once again the problem definition is the
steering force in the conception of such an EPS business models. A
schematic summary of such a layout is presented in the following
Figure 70.
(Philosophy) Philosophy of, or relating to the Socratic method of
eliciting knowledge by a series of questions and answers. [from Greek
maieutikos relating to midwifery (used figuratively by Socrates), from maia
midwife]
1
188
Chapter 5. Business Models for an EPS
Chapter 3
Business
Model Basic
Constructs
Chapter 2
EPS Value
Proposition
Chapter 4
Chapter 5
Business
Model
Working
Definition
Problem
Definition
EPS Business
Models
Figure 70 Graphical summary of the liaisons among chapters 2, 3 and 4 with
the contribution presented in Chapter 5
It is important to remark at this point that there is no unique way of
profiting from a value proposition: in other words, even two
identical offerings can generate different business models which
outperform each other according with the given conditions. Such
conditions are relevant for technologies that have already reached
full implementation, but they can be neglected for the EPS level of
maturity. Thus, the second part of this chapter presents only one
possible, very generic, embodiment of such business models. Such a
result is fully supported by the multifaceted analysis at the basis of
this dissertation, but it does not exclude other possible scenarios
which might be as valid as the ones introduced hereby. Disclosing
all the possible business connotations that an evolvable production
system might yield at its current stage would require an utmost
research effort, out of the scope of this work: besides, in view of the
above, it would not add value to its underlying logical construction.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The reviewed literature has shown how broad the scope of the
business model concept is. In order to proficiently apply it in this
analysis it is therefore necessary to narrow down such a
heterogeneous domain and select the aspects and the related
scientific constructs which will be operatively targeted. In view of
this, the forthcoming section must be read as a continuation and
integration of the §2.3. While in such paragraph the business
model’s relevant literature has been reviewed and, in part, presented
through an original point of view, this sections’ purpose is reducing
such body of knowledge into a holistic new construct that can serve
the objective of this analysis.
In line with such purpose, the aforementioned §2.3 can be
conceptually summarized in the definitions of business model
provided by a limited set of authors. In particular, (Zott et al., 2010)
see the business model as a system of interdependent activities that
transcends the focal firm and spans its boundaries; (Osterwalder and
Pigneur, 2010) state that business models describe the rationale how an
organization creates, delivers, and captures value. It is finally possible to
add the definition from (Chesbrough and Rosenbloom, 2002) that
portrays a business model as the heuristic logic that connects technical
potential with the realization of economic value. These three descriptive
definitions are not mutually exclusive and can be used, once
integrated with the specific requirement of this work, as reference
for formulating the required working definition.
The concept of business model can be mapped through two main
dimensions. The horizontal one which includes the different
components of a business model and the vertical one representing
the depth of representation of each single element. The business
model concepts presented in the most sophisticated contributions
reviewed are in fact modular and they support different levels of
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Chapter 5. Business Models for an EPS
granularity for the description: choosing the target elements and
related level of detail provide therefore the required working
definition for a given problem. Thus, the selection of the right
elements to analyze, and the suitable extent is a fundamental step of
this work and it strongly depends on the research object and on its
level of definition.
While being quite well assessed from the technical point of view,
the EPS paradigm has not yet achieved industrial status: this mostly
due to its disruptiveness respect to the current technologies in use.
Modular architectures and distributed control must now find real
applications that can be pivotal for their introduction. This places
the EPS on the middle steps of the applied research steps as seen in
Figure 9 in § 2.3.3.2 In this particular stage of the development the
lack of industrial embodiment and consequent architecture of the
economic output of such system is a limit to both the range and
the depth of the domain of application of the business model
concept. In other words, the full extent of such analyses would only
make sense for well-established markets: when handling innovation,
the spectrum must be adapted to the relative technological maturity.
In view of this, Figure 71 illustrates the working definition of
business model used in this dissertation. The core element of any
business model is the value proposition. With reference to such a
construct the figure is divided in two parts: a (1) top section
including the definition of such value proposition which, in turn, is
defined as a set of elementary offerings. This part has been covered in
Chapter 4 where a general bottom-up approach for individuating
the potentially interesting value offerings that compose the general
value proposition of a complex object is introduced and applied to
EPSs. (2) A bottom section encompassing in a rational structure all
the elements to be put in place to concretely create and consequently
capture such value offerings. The description of (2) is the object of
this paragraph while its particular application to EPS will be
presented in the following one.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Value Proposition
Offering
Offering
Offering
...
Offering
Definition
Set of
Creation and Capturing
Production Paradigm
Legenda
Activity
Value configuration
Chain Shop Network
Architecture of
the revenue
Resource
Business
Model
Stakeholder
Figure 71 Working definition of Business Model
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Chapter 5. Business Models for an EPS
A single business model is represented in Figure 71 through a
black-dotted, edge closed, geometrical shape. Such a curve encloses
all the activities and related resources necessary to create and capture
the value connected with a given offering or with a part of it. Given
the nature of the target offering, the necessary activities will assume
a well-defined value configuration. As seen in § 2.3.3.3.2 the possible
configurations are:
i.
ii.
iii.
Sequence: Value Chain. In case of transformation of input
into output.
Cycle: Value Shop. Applied when solving customer problem.
Hub: Value Network. Used when connecting customers.
In conclusion, one can say that the business model of a
company identifies the basic offerings targeted by the firm and
where it is placed in the process of value creation and capturing
underling the overall value proposition, or in other words which is
its role of the organization in the production paradigm2.
A single stakeholder of the focal system can target different value
offerings connected with it. Thus the system stakeholder is
represented by a red-dotted edge closed curve which encompasses
one or more business models. The stakeholders interact with each
other through a classical supplier-user scheme. Such relationship
entails a flow of (A) money (or other sort of benefits) from the user to
the supplier, according with the constraints imposed by the (B)
interfacing economic activity and the (C) related pricing method. The set
of (A), (B) and (C) is in this work referred as Architecture of the
revenue (see §2.3.3.3.3). For a more detailed description of the single
In this work the product in exam is a whole automatic assembly
system that is usually the result of cooperation between more than just a
company. Therefore in order to deliver such an installation there are
different business models put in place to fully encompass the value
position offered by the AAS (in this case an EPS). The set of such business
models is therefore a superior business model that in this work is called
Production Paradigm.
2
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
elements the reader can refer to the aforementioned §2.3 as well as to
the related bibliography.
The definition and characterization of the Value Proposition of an
evolvable production system carried out in Chapter 4 is the
necessary input as well as the first element in the description of the
EPS business models. Starting from the single patterns which
underpin EPS value offerings (as disclosed in §4.4.2.2) this
paragraph explores in detail the issues related with creating and
capturing such value. In view of this purpose, the activities of each
stakeholder as a single entity, and in relation with other
stakeholders, have been investigated and characterized following
the formalization introduced in the previous section. The resulting
findings are introduced in the forthcoming paragraphs which deal
with the other two elements of a business model as defined in this
thesis: the Value Configuration and the Architecture of the Revenue
respectively.
As for the characterization of the Value Proposition, once again
the result of this analysis must be read as a summary of the
indications one can infer from the current technological maturity of
the evolvable paradigm rather than a fully featured description,
such as the ones that refer to technologies already available on the
market. The different Value Offerings are treated singularly but
often the scope of the related analysis is broadened to the
neighboring activities that belong to other Value Offerings. This
allows a more vivid representation of the spatial dimension of the
value creation. Finally, the focus of the following work is on the
evolvable paradigm’s envisaged disruptive innovation: all the
elements not directly connected with such targets have been left out
of the work or, if necessary for the overall understanding, briefly
summarized. Examples in the former category are the activities of
194
Chapter 5. Business Models for an EPS
testing or procurement, while the latter cluster includes the shortly
depicted maintenance and coding among the others. This should not
be an obstacle for the reader as any non-disruptive element is in line
with the currently established practice.
The work presented in this paragraph aims at answering the
question: how does the “stakeholder x” add value to an Evolvable
Assembly System? The aggregated Value Offering individuated in §
4.4.2.2 is therefore analized and consequently translated into a set of
activities and related resources which depict a specific EPS business
model. The Value Configuration is disclosed for each one of the
activities along the related description. The concept of value
configuration is broadly described in § 2.3.3.3.2. The following list
summarizes for the reader the possible connotation and the related
salient aspects of such a construct:
1. Value Chain: transformation of input into output with
sequential relationship logic.
2. Value Shop: solving customer problems with cyclic
relationship logic.
3. Value Network: Linking customer through mediation.
The activities and their related input and output resources are
then graphically represented following the notation introduced in
Figure 72 below. The more complex activities have been exploded
into the composing sub-activities.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Input/
resource
Activity
Output/
resource
Figure 72 Notation for the Graphical representation of activities and related
resources
Such descriptions are then placed within the broader scope of
the production paradigm through the disclosure of the relationships
among the analized business model and the other stakeholder of the
EPS. Finally the last section of the paragraph introduces a summary
of the findings.
In general, the manufacturing firms relate to their production
facilities from a multiple perspective. In reference to automatic
systems and using the familiar, and sometimes misleading, jargon
connected with the business models the end-user of a system can be
considered a product manufacturer, a host of production facilities or
even a system integrator. In line with this, an EPS end-user not only
exploits such systems as a resource to manufacture a product that is
subsequently sold with profit (final customer perspective), but also
participates in defining the system requirements and consequently
developing the actual installation (production system perspective).
As broadly discussed along this dissertation, this stage of maturity
of the EPS technology, does not allow a meaningful study of the
former perspective. On the other hand the theoretical and practical
contributions in the EPS domain permit a first assessment of the
business models connected with the latter, production system
development perspective. Such work is envisaged to be pivotal in
the approach to the market of such disruptive technology. As
development costs in automatic systems are those that carry the
highest risk for miscalculation, this approach to EPS is further
supported in its importance.
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Chapter 5. Business Models for an EPS
The following section will study the identified
and
disclose the important activities and connected resources that an
end-user must put in place in order to unlock the potential value
held within it.
The particular graphical solution chosen in § 4.4.2.2 for
representing the aggregated EPS Value Offerings (disclosed in
Chapter 4) allows to clearly distinguish all the building blocks of
such offerings. This, in turn, provides a perfect starting point to
detail the necessary underlying activities. In view of this, the
following Figure 73 (previously seen as Figure 63) is hereby redrawn.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 73 Aggregated value offering of an EPS for the end-user:
First set of activities to be analized are the ones connected with
the workflow. The workflow is a product specific construct, thus the
company that uses it is the only stakeholder logically interested in
putting it together. The initial step is of course the creation of the
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
workflow. Starting from the final product design, the end-user
establishes the requirement of the assembly process through an
analytical phase. Such indications are then examined and translated
into a set of necessary skills through the EPS models and languages.
Finally the single required skills are aggregated to form the final
Assembly Process Workflow.
The activities connected with the workflow creation follow a
well-defined value chain. Nevertheless each ring of such a chain
demands an extensive analytical effort which in turn qualifies such
sub-activities as value shops. The following Figure 74 provides a
graphical representation of the activities and resources connected
with the creation of the workflow.
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Chapter 5. Business Models for an EPS
Creation of the
Workflow
Product Design
EPS models and
languages
Analysys of the
given product
Assembly
Process
Requirement
Formulation of the
list of required
skills
Required Skills
Formulation of the
assembly process
workflow
Assembly
Process
Workflow
Figure 74 Creation of the workflow: graphical representation
The Assembly Process Workflow is an important construct for
the ensuing activities related with the physical realization of the
Evolvable Production System; nevertheless, unlike in traditional
systems, it does not represent a heavy constraint on the system
embodiment. In the EPS environment the concept of skill links
processes and production equipment which are hence studied in
parallel. This is due, as widely discussed in the related reviewed
literature, to the possibility of a quick reconfiguration offered in
principle by the EPS. Figure 75 offers a synthetic overview of this
statement.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Workflow
Product
Product
Product
Design
Design
Design
Skill
Skill
Skill
Skill
Skill
Skill
Skill
EPS
EPS concurrent processequipment assessment
Modules
Modules
Modules
Modules
Modules
Available Equipment
Figure 75 EPS concurrent process-equipment identification3
In view of this, the continuous improvement of the workflow is
an integral part of the process that leads to the most effective
configuration of the EPS for a given product. Production feedback or
newly available pieces of equipment (as well as no longer available
ones) are the input to such an activity while the output is, indeed, an
improved workflow. The process described requires a cyclic
approach thus this activity is configured as a value shop. Figure 76
displays the content of this description.
The orange dotted arrow in the upper part of the picture
indicates the current research effort aimed at extending the concept
of skills in order to allow through such construct a description of the
product features along with the process and the equipment. This
issue will be further discussed in the final Chapter 7
3
200
Chapter 5. Business Models for an EPS
Production
feedback
Continuous
improvement of the
current Workflow
Design of the
new workflow
New production
equipment
description
Figure 76 Continuous improvement of the current workflow: graphical
representation
The last activity, concerning the workflow, is its maintenance
which is summarized in Figure 77. Such maintenance is envisaged to
be mostly reactive for problems and errors surfacing during
production. Once again the configuration is the typical one in case of
use of problem solving techniques: value shop.
Production
feedback
Maintenance of the
Workflow
Maintained
assembly
process
workflow
Figure 77 Maintenance of the workflow: graphical representation
Another important cluster of activities partaken by the end-user
of an EPS is the one connected with the creation of the system itself.
In traditional state of the art systems (see § 2.4) the process that
brings to the final system is an integration process that involves
several different external stakeholders called system integrators. Viceversa the evolvable paradigm allows in principle to create the
system though a simple deployment of the components followed by
a configuration phase. The envisaged level of expertise required for
such activities is comparable, to some extent, to setting up a machine
tool. Thus this dissertation assumes that this knowhow can be and
will be acquired and kept inside the organization that uses the
automatic installation (hence the advantage of EPS).
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
In detail, the creation of an EPS is a chain of activities starting
from the formulation of the general system requirement from the
market demands and the envisaged workflow. This is a cyclic
process. In parallel to this, it is possible to collect the necessary
building blocks for the system. Figure 78 shows the multiple sources
of such building blocks. The platform units can be already available
as internal assets, or can be purchased: (1) directly from the
manufacturer or through the Mechatronic Agents provider. The
workstations can be built in house, or in case of particularly
demanding applications can be purchased through a specialized
partner (the workstation supplier). The modules required for each
workstation can be purchased, once again, directly from the
supplier, through the MA provider or they can be legacy
components, available from previous processes.
Platform Supplier
Workstation Sup
WS
WS
Module Supplier
MA provider
Collection of the
building blocks of an
EPS
EPS
End-user
Internal storage
WS
Figure 78 Multiple sources of the EPS building blocks
The evolvable paradigm opens the possibility of coopetition
among different end-users. Given the nature of the general purpose
202
Chapter 5. Business Models for an EPS
elements both the modules and the platform unit can be shared with
potential benefit on the risks of owning automation components.
Such a possibility is presented in the following Figure 79. In detail
the virtual shared repository is composed of the internal repositories
of each coopetitor along with shared external ones. Different policies
on the precedence of access to internal and external resources might
be put in place according with the portion of the risk partaken by
each user. Figure 79 introduces the most basic case of shared
repository with involvement of the simple user: options in which for
example the shared external repository is managed by third parties
(with related business models) are also envisaged as possible. The
portrayed objects are both production modules as well as platform
units.
Virtual shared repository
End-user n
Internal repository
End-user 1
Internal repository
Shared external
repository
...
Focal End-user
Internal repository
EPS
Figure 79 Example of coopetition among EPS end-users: a virtual shared
repository for the modules.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
A further characterization of the activities connected with
collection of EPS elements is presented in § 5.3.1.6. Finally, once the
elements have been collected and the general system requirements
assessed, the end-user can proceed with the deployment of the EPS.
Figure 80 presents a graphical summary of the whole process for the
creation of an EPS.
Creation of the
EPS
Market
requirement
Formulation of the
general system
requirement
General system
requirement
Assembly
Process
Workflow
Deployment of the
EPS
Platform units
Assembly
Workstations
Collection of the
necessary building
blocks
EPS elements
EPS Multi-Agent
System
Deployed EPS
Figure 80 Creation of the EPS: graphical representation
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Chapter 5. Business Models for an EPS
Figure 81 represent the process of renewal of an EPS. The need to
renew the value of the system is triggered by a change in the
required workflow. This occurrence can be due to: (1) new product
features and consequent new required skill, (2) change in the market
condition with new required volumes or mix (3) new technologies
available to be integrated in the production or (4) new improved
methods to carry out the process.
Renewal of the
EPS
Current assembly
process Workflow
Analysis of the
current an fo the
modified Workflow
New general
system
requirement
New assembly
process
Workflow
Redeployment of
the EPS
Additional
Platform units
Additional
Assembly
Workstations
Collection of the
required
additional building
blocks
EPS elements
Redeployed EPS
Figure 81 Renewal of the EPS: graphical representation
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The new system requirement is inferred through the analysis of
the new workflow in comparison with the old one, while the
additional elements are collected in the same way as described for
the creation of the EPS. A quick comparison among Figure 80 and
Figure 81 also confirms that the processes of creation and renewal of
the EPS are analogous: both of them are configured as a chain of
more or less cyclic activities.
Once the workflow has been devised and the EPS deployed the
production can run (see Figure 82). As mentioned before, this part of
the end-user business model is out of the scope of this work. This
activity is reported here because it provides the production feedback
related with the system performances which are a necessary input
for many activities across the different stakeholders in this scrutiny.
Assembly
process
workflow
Run the production
Production
Feedback
Deployed EPS
Figure 82 Run the production: graphical representation
The part of the
connected with the lifecycle of the
workstation has been left out from the description related to such a
stakeholder. Since the activities that the end-user puts in place to
meet such sub-offerings are analogous to the ones of the envisaged
specialized stakeholder called Workstation Supplier, their
description has been only included in the forthcoming related
section. Thus, the reader can consider the related § 5.3.1.2 both as an
independent part in relation with the Workstation Supplier and/or a
completion of the description related with the End-user.
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Chapter 5. Business Models for an EPS
The end-user of the EPS is a customer of all the other
stakeholders. The following Table 9 summarizes the relevant specific
relationships among the end-user and the other envisaged
stakeholders of an EPS.
Stakeholders
Workstation
Supplier
END-USER
Relationships description
 Joined analyses of the intended assembly
process workflow aimed at devising the
composite skill embodiment into equipment
 Sells 4 the fully integrated assembly
workstation. Such workstations provide one of
the assembly task required by a specific
assembly process workflow
Multi-Agent
System
Supplier
 Sells the EPS Multi-Agent System including all
the tools necessary to run the production
Platform
Supplier
 Sells the EPS platform units
Module
Supplier
 Sells the EPS production modules needed to
create the required assembly workstations
Mechatronic
Agent
Provider
 Joined analysis of the intended workflow to
devise suitable components to deliver it.
 Sells EPS production modules and EPS
platform units necessary to deliver the given
workflow
Table 8 Summary of the relationships among the End-User and the other EPS
stakeholders.
In this table and in the following ones of this kind the word sells is
generically used to represent the activities connected with the customer
acquisition of the element in exam: other possible activity are renting
leasing licensing etc… these aspect will be described in the following
section that deals with the Architecture of the Revenue.
4
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
In order to fulfill the requirement of a given assembly process
the necessary atomic skills must be individuated and rationally
organized in a set of basic assembly tasks. Each assembly task
represents a composition of lower level skills and it is embodied into
a specific workstation. In traditional systems the integration of a
workstation is a knowledge intensive task that needs specific
expertise provided by organizations that act as system integrators
(see § 2.4). This is not the case in EPS where the modular structure of
both hardware and software permits to create a workstation through
a simple configuration process5 rather than an integration one. In the
EPS domain the end-user is thus likely to acquire internal expertise
for carrying on this endeavor. Nevertheless this dissertation includes
the possibility that for the automation of some particular processes,
which requires very specific knowledge, the end-user might rely on
external resources: the workstation suppliers. An example might be
a firm in need to automate a process through laser welding for the
first time.
In view of this, it is important to once again remark that the
activities described hereby for the workstation supplier are entirely
transferable to the end-user.
The
disclosed in Chapter 4 and presented again in
Figure 83 is the starting point for discussing the activities that lead
to the creation of the value locked in such an offering.
As pointed out in Chapter 2, current research efforts in EPS domain
are aiming at self-configuring systems. This will, in turn, further simplify
the process of creation of the workstation that will evolve from a
configuration to a simple deployment.
5
208
Chapter 5. Business Models for an EPS
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 83 Aggregated value offering of an EPS for the workstation supplier:
The creation of a workstation is a sequential process in which
more or less each step entails some process solving cyclic activities.
The first sub-activity is an analysis of the composite skill to be
embodied in the workstation. The individuated requirements are
then translated into a conceptual design of the workstation that is, in
turn, mapped into existing generic equipment. Eventually the
equipment is acquired from a set of module suppliers and integrated to
form a final workstation: this last process is supported by the
functionalities of the EPS Multi-Agent System. The following Figure
84 represents the described process.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Configuration of a
Workstation
Required
composite skill
Analysis of the
composite skill
Formulation of the
composite skill
conceptual
eqipment
embodiment
Skill/equip.
available for the
specific task
Available EPS
production
Modules
EPS Multi-Agent
System
Req. embod.
composite skill
into equipment
Composite skill
conceptual equip.
embodiment
Allocation of the
skills on the
available resources
Map skill to
equipment
Collection of the
necessary
modules
EPS Production
Modules
Integration of the
workstation
Assembly
Workstation
Figure 84 Configuration of a workstation: graphical representation
210
Chapter 5. Business Models for an EPS
The following Figure 85 provides a further conceptual
representation of the necessary steps towards the integration of an
EPS assembly workstation.
Workstation
Modules
Modules
Modules
Modules
Skill
Skill
Skill
Skill
Skill
Skill
Skill
Skill
Modules
Skill
Skill
Composite skill
Skill
Modules
Modules
EPS Modules
Modules
Workflow
Workflow
Figure 85 Creation of a workstation in the EPS domain
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The integration of the resulting workstation on the final platform
is, in principle, not a major concern in the EPS domain. The seamless
coupling of the WSs with the rest of the final system is ensured by
the standardized mechanical and logical interfaces. As any industrial
installation the workstations are subject to maintenance, both
scheduled and reactive. This activity along with the related input
and output are portrayed in Figure 86.
Schedule of the
maintenance
Maintenance of the
Workstation
Maintained
Workstation
Production
feedback
Figure 86 Maintenance of the workstation: graphical representation
The composite skill behind the assembly workstation can be in
some cases upgraded to new technologies or simply changed to
industrial standards. This process of renewal of the workstation’s
value is composed of two activities: a cyclic analysis for the
continuous improvement of the focal composite skill and a
reconfiguration of the workstation. This latter process is analogous to
the aforementioned configuration of the workstation. The activity of
renewal of the workstation has a limited scope: any major or
structural change in the composite skills might in fact require the
integration of a complete new workstation. The following Figure 87
presents the described activity.
212
Chapter 5. Business Models for an EPS
Renewal of the
Workstation
Industrial Standard
New Technologies
Additional
Modules
Analysys for the
continuous
improvement of
the WS’s skill
New req.
embodiment of
the comp. skill
into equip.
Reconfiguration of
the workstation
New assembly
Workstation
Figure 87 Renewal of the workstation: graphical representation
As explained in the related section of Chapter 4, the workstation
is a process specific object, thus it is largely customized on the need
of the specific user. Its realisation requires a large exchange of
information between the supplier and the user. This, in turn, renders
it convenient for these two stakeholders to directly negotiate the
acquisition of such installations. Therefore the 𝐴
is coupled
with the one related to the creation of the workstation. The activities
related to such purchase processes are not disruptive in relation to
the traditional ones, thus they have been left out of this scrutiny.
Even though they do not explicitly appear in this description, the
workstation supplier must be aware of the EPS models and languages
in order to proficiently cooperate with the EPS end-users and the
EPS production module suppliers.
A final important remark: as for any business model presented
in this dissertation, this workstation supplier business model can be
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
entirely fulfilled by a single organization or divided among several
firms working together. With reference to this specific instance, for
example, one company can provide the necessary engineering
activities and another one the actual integration. The level of
granularity chosen in this thesis coincides with a reasonable level of
aggregation of the AVOs resulting from extensive confrontation
with the current scenario and the industrial perspective.
The workstation supplier occupies an intermediate position in
the overall EPS production paradigm: in particular such a form is a
supplier for the end-user and a customer for the suppliers of the
Multi-Agent System and of the EPS production modules. The
summary of such links is presented in Table 9.
Stakeholders
End-user
WORKSTATION SUPPLIER
Relationships description
 Joined analysis of the intended assembly
process workflow aimed at devising the
composite skill embodiment into equipment
 Purchases the workstation consequently
produced
Multi-Agent
System
Supplier
 Sells the EPS Multi-Agent System including all
the tools necessary to integrate a workstation
Module
Supplier
 Sells the EPS production modules needed to
create the required assembly workstations
Table 9 Summary of the relationships among the Workstation Supplier and
the other EPS stakeholders
214
Chapter 5. Business Models for an EPS
The Multi-Agent System supplier is the stakeholder that
provides the operative system of an EPS. The MAS includes all the
software tools necessary to integrate and run an evolvable
production system. The underlying business model is conceptually
analogous to the one for a software house with some important
differences. The market of production automation is quite protective
from the offer side and this, in turn, might push the big players in
this domain to develop their own multi-agent control system. The
choice of describing the MAS supplier business model as an
independent one rather than as an appendix of the platform or
module supplier ones comes from the assumption that a unique
agent platform (or any other approach to distributed control)
exploited by different OEMs might be a critical success factor6 for
bringing the EPS paradigm to market.
The
is composed by the activities related to the
creation and the renewal of the EPS Multi-Agent System. Figure 88
provides a graphical description of such an aggregation of atomic
value offerings.
Observation of the smartphones market has revealed that this is the
case for the Android® platform made available by Google® to several
manufacturers. Nevertheless observation of the same market reveal that an
opposite strategy put in place by Apple® with its proprietary iOS®
coupled with the hardware pays its dividends. In principle, with relation
with the purpose of this work, it is not fundamental to disclose the actual
pattern to market of EPS which will be driven by the actual technological
embodiment which, in turn, follows the forthcoming market application.
6
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 88 Aggregated value offering of an EPS for the Multi-Agent System
supplier:
The creation of a MAS is a complex sequential activity, which
once again is composed of a set of cyclical problem solving-like subactivities. The process starts with an early assessment of the average
market needs which are then translated into a conceptual design.
Such a preliminary design is then integrated with the industrial and
EPS standards in order to produce a final design that meets the
requirements of all the users. It is important to remark that the users
of an MAS are several: from the EPS end-user, to suppliers of
modules, platform units or workstation. The multi-agent system
must include all the software tools to develop, build and run an
evolvable production system. The last sub-activity is the coding of
the final software design into the EPS MAS. This process is
graphically summarized in the following Figure 89.
216
Chapter 5. Business Models for an EPS
Creation of the
EPS Multi-Agent
System
Market Analysis
Industrial and
EPS standards
Assessment of the
average customer
needs
Conceptual
Design of the
EPS MAS
Design of the EPS
Multi-Agent
System
EPS MAS final
design
Coding of the EPS
Multi-Agent
System
EPS Multi-Agent
System
Figure 89 Creation of the EPS Multi-Agent System: graphical representation
As for any piece of software the EPS Multi-Agent System will
need periodical update of the functionalities to the new industrial or
EPS standard. This cyclic process of renewal of the MAS value is
portrayed in Figure 90.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Renewal of the
EPS Multi-Agent
System
New Industrial
and EPS
standards
Collection of the
additional
requirement
Conceptual
Design of the
EPS MAS
Design of the EPS
Multi-Agent
System additional
functionalities
EPS renewed
MAS final
design
Coding of the EPS
Multi-Agent
System additional
functionalities
Renewed EPS
Multi-Agent
System
Figure 90 Renewal of the EPS Multi-Agent System: graphical representation
Finally, the scheduled and reactive maintenance activities are
summarized as follows in Figure 91.
218
Chapter 5. Business Models for an EPS
Maintenance of
the EPS MultiAgent System
Maintenance
plan
Scheduled
maintenance
activities
Production
feedback
Reactive
maintenance
activities
Renewed EPS
Multi-Agent
System
Figure 91 Maintenance of the EPS Multi-Agent System: graphical representation
219
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
While the end-user of the EPS system is the customer of all the
other envisaged stakeholders, a Multi-Agent Supplier has the role of
providing the MAS along with the specific tools to all the
organizations involved in the development of the evolvable
production system. The following Table 10 introduces the list of
such business liaisons among the MAS supplier and the other EPS
stakeholders.
MULTI-AGENT SYSTEM SUPPLIER
Stakeholders
Relationships description
 Purchases the EPS Multi-Agent System
End-user
including all the tools necessary to run the
production
 Purchases the EPS Multi-Agent System
Workstation
including all the tools necessary to integrate a
Supplier
workstation
Platform
Supplier
 Purchases the EPS Multi-Agent System
including all the tools necessary to handle the
transport skills and their composition
Module
Supplier
 Purchases the EPS Multi-Agent System
including all the tools necessary to handle the
manufacturing skills and their composition
Mechatronic
Agent
Provider
 Has the license to sell an MAS or parts of it.
 Has the license to sell products, the
mechatronic agents, which include the MultiAgent System
 Re-sells products, the mechatronic agents,
which include the Multi-Agent System
Table 10 Summary of the relationships among the MAS supplier and the
other EPS stakeholders
220
Chapter 5. Business Models for an EPS
The EPS platform supplier produces and sells the generic units
that support the internal logistic of an evolvable production system.
As seen above, the end-user, according with the general production
requirement, composes the platform units into an EPS platform that
provides the necessary logistic among the assembly workstation. In
view of this, a platform unit is a general purpose object that can
serve any process within a particular range of parameters. Examples
of those parameters are: absolute precision or repeatability of
positioning, size or weight of the transported object, speed,
acceleration etc… Any process that falls within the allowed span can
be in principle supported by the related platform unit. A supplier of
such elements can have a large offer that covers different needs.
The following Figure 92 re-introduces for the reader the
aggregated value offering underlying the platform supplier business
model. The portrayed
provides the necessary input for
disclosing the necessary activities for the creation of such value.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 92 Aggregated value offering of an EPS for the platform supplier:
Given the general purpose of the platform units the process of
creating such objects starts from a market analysis; such scrutiny is,
in turn, aimed at disclosing the average needs of the target customer
and at translating them into a conceptual design that embeds such
information. At this point the EPS model and languages allow
rendering this conceptual design into a generic transport skill
description which together with the industrial and EPS standard is
the necessary input to produce a final design of the EPS platform
unit. The generic transport skill is the description of the average
skills that are required by the target customer. Each one of the skill
attributes comes with an allowed range or with a discrete set of
values that can be customized by the user. Figure 93 provides a
graphical representation of the generic transport skill as well as
example of instantiations.
222
Chapter 5. Business Models for an EPS
End-user
Specific
Transport Skill
Attribute 1 = 1
Attribute 2 = 9
Attribute 3 = b
End-user
Platform Supplier
Generic
Transport Skill
Attribute 1: {0/1}
Specific
Transport Skill
Attribute 1 = 0
Attribute 2 = 7
Attribute 3 = b
End-user
Attribute 2: {1-10}
End-user
Specific
Transport Skill
Attribute 3: {a,b,c}
Specific
Transport Skill
Attribute 1 = 0
Attribute 2 = 6
Attribute 3 = a
Target Customer
Requirement
Attribute 1 = 0
Attribute 2 = 4
Attribute 3 = c
Figure 93 Generic transport skill and instantiations
The final phase is the manufacturing of the unit: in this phase the
EPS Multi-Agent System (in particular a transport agent) is
integrated with the hardware to deliver the final Mechatronic Agent.
The following Figure 94 represents a graphical summary of the
described process.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Creation of the
EPS platform units
Market Analysis
EPS models and
languages
Industrial and
EPS standards
EPS Multi-Agent
System
Assessment of the
average customer
needs
Conceptual
Design of the EPS
platform unit
Translation in a
generic transport
skill
Generic
transport skill
description
Design of the EPS
platform unit
Platform unit’s
final design
Manufacturing of
the EPS platform
unit
EPS platform
unit
Manufacturing
feedback
Figure 94 Creation of the EPS platform units: graphical representation
Finally, the maintenance of the platform unit is presented in
Figure 95. Although such an activity is carried out in a rather
traditional way, it is presented hereby due to the disruptiveness of
the concept behind it. Maintenance of traditional automatic
industrial installations is usually a task for the system integrator that
224
Chapter 5. Business Models for an EPS
builds the system. The evolvable paradigm paves the way to a much
more efficient direct relation User- Supplier on this matter.
Production
feedback
Maintenance of the
platform unit
Maintained
platform unit
Figure 95 Maintenance of the platform unit: graphical representation
The following Table 11 presents all the envisaged relationships
between the EPS Platform Supplier and all the other stakeholders of
the system.
Stakeholders
PLATFORM SUPPLIER
Relationships description
End User
 Purchases the EPS platform units
Multi-Agent
System
Supplier
 Sells the EPS Multi-Agent System including all
the tools necessary to handle the transport
skills and their composition
Mechatronic
Agent
Provider
 Acquires the license to sell the EPS platform
units
 Purchases EPS platform units
Table 11 Summary of the relationships among the Platform Supplier and the
other EPS stakeholders
The EPS module supplier produces and sells the building blocks
for the assembly workstations. Such production modules are general
purpose equipment able to deliver an atomic skill. The composition
of different modules generates a composite skill that can accomplish
a higher level assembly process. Modules are composed in assembly
225
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
workstations which, in turn, are able to deliver one of the assembly
tasks that belong to a given workflow. As the atomic skills
composing a workstation are not homogenous, building such
installations might require different modules from different
manufacturers.
As customary in this particular analysis the
is the
main input to disclose the activities and related resources which
allow to portrait the process of creation of the value lock in such
offering. The following Figure 96 presents again the graphical
summary for the aggregated value offering of the module suppliers
introduced at first in Chapter 4.
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 96 Aggregated value offering of an EPS for the module supplier:
The creation of an EPS production module is similar to the one
described for the analogous activity referred to a platform unit.
Starting from an analysis of the market, the assessment of the average
226
Chapter 5. Business Models for an EPS
customer needs is the first step that leads to a first conceptual design
for the production module. The conceptual design, along with the
EPS model and languages lead to the description of a generic
manufacturing skill. Such a manufacturing skill represents an average
skill which is likely to be needed by a certain amount of users: the
target market. Such a concept is analogous to the one of generic
transport skill (see Figure 93), but with reference to manufacturing.
The following phase leads to a final design of the production
module which complies with the industrial and EPS applicable
standards and that is able to deliver the intended generic skill. The
manufacturing of the hardware and the concurrent integration of the
EPS Resource Agent belong to the last phase of the creation of the
EPS production module. The following Figure 97 summarizes in
graphical form the content of the description above.
227
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Creation of the
EPS production
module
Market Analysis
EPS models and
languages
Industrial and
EPS standards
EPS Multi-Agent
System
Assessment of the
average customer
needs
Conceptual
Design of the EPS
production
module
Translation in a
generic manuf.
skill
Generic
manufacturing
skill description
Design of the EPS
production
module
production
module’s final
design
Manufacturing of
the EPS production
module
EPS production
module
Manufacturing
feedback
Figure 97 Creation of the EPS production module: graphical representation
The following Figure 98 introduces the process of maintenance
of a production module. Analogously to what has been discussed
regarding the maintenance of a platform unit, this activity is
conceptually disruptive respect to traditional automatic system’s
maintenance. Given the general purpose nature of a production
228
Chapter 5. Business Models for an EPS
module, in an EPS this process can be handled directly by the
supplier rather than through the integrator of the system.
Production
feedback
Maintenance of the
production module
Maintained
production
module
Figure 98 Maintenance of the production module: graphical representation
The process of purchasing a production module (as well as the
one of purchasing a platform unit or the Multi-Agent System) is
described in the following section regarding the Mechatronic Agent
provider. Even though, in fact, the 𝐴
, 𝐴
and
𝐴
can be exploited directly by the creator of such elements
respectively, in this dissertation all the value coming from the trade
of general purposes elements has been allocated on the intermediary
stakeholder named Mechatronic Agent provider. This assumption is
supported by the nature of the interested elements but given the
modular nature of the analysis presented in this dissertation it is
quite easy to relax by simply shifting the related activities directly
onto the elements’ suppliers. In line with this the following section
also introduces a scenario where the MA provider is not included in
trading the EPS elements.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The main customers of the module supplier are the stakeholders
involved with the creation of the EPS assembly workstations,
namely the end-user and the workstation supplier. Such business
relationships along with the others disclosed by the previous
analysis are summarized in the following Table 12.
Stakeholders
MODULE SUPPLIER
Relationships description
End-user
 Purchases the EPS production modules
required to integrate an assembly workstation
Workstation
Supplier
 Purchases the EPS production modules
required to integrate an assembly workstation
Multi-Agent
System
Supplier
 Sells the EPS Multi-Agent System including all
the
tools
necessary
to
handle
the
manufacturing skills and their composition
Mechatronic
Agent
Provider
 Acquires the license to sell the EPS production
modules
 Purchases EPS production modules
Table 12 Summary of the relationships among the Module Supplier and the
other EPS stakeholders
230
Chapter 5. Business Models for an EPS
The mechatronic Agent Provider is a stakeholder that exploits a
value offering located among the suppliers of the EPS building
blocks and the end-user. The conceptualization presented for this
stakeholder is quite different from the ones adopted for the others.
While for the previous stakeholders the description of the activities
has revolved around a single scenario the following analysis
encompasses two possible embodiments for the process of creating
the value associated with
. In the first one the
ownership of the elements remains to the supplier, in the second one
it is acquired by the MA provider. In order to complete the analysis
a third scenario that excludes the presence of an independent
stakeholder for this value offering has been briefly introduced and
discussed.
The reason for this choice lies in the nature and in the level of
maturity of the EPS technology. In detail, the reviewed literature
and consequently the Chapter 4 have clarified considerable
information about the EPS technological solutions and the potential
values connected with it. This, in turn, has permitted clearing out
most of the speculation about the stakeholders connected with the
creation, use and update of such elements. Unfortunately this is not
the case for the activities related with purchasing and transferring
the value associated with the EPS building blocks. More hints on this
potential business model might only come when the EPS are closer
to the market.
As a consequence of the findings of Chapter 4, the atomic value
offerings associated with the purchase and the transfer of general
purpose EPS elements such as the Multi-Agent System, the platform
231
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
units and the production modules are aggregated to form the
(see Figure 99).
EPS
Lifecycle
Creation Purchase
Use
Renewal Transfer
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 99 Aggregated value offering of an EPS for the Mechatronic Agent:
Such aggregated value offering comes from the fact that the
value potentially generated by the process of purchasing general
purpose elements is in principle independent from the one available
when creating such elements or using them. In traditional systems
the end-user buys the final fully featured system from a set of
system integrators which, in turn, deal with the basic components
procurement. The evolvable paradigm opens up three possible
scenarios:
1. The end-user purchases the required elements directly from
the suppliers. This direct trade alternative is visualized in
Figure 100. On the one hand this scenario seems really
appealing to EPS because it simply requires that user and
supplier speak the same language in terms of process
requirement, which is an utmost feature of EPS. On the
other hand a vast amount of potential suppliers and their
232
Chapter 5. Business Models for an EPS
geographical distribution might be too hard to handle for
small organizations
End-user/Workstation Supplier
Workstation
Modules
Modules
Module
Supplier 1
Modules
Modules
Module
Supplier 2
...
Modules
Modules
Module
Supplier n
Direct Trade
Modules
Modules
Modules
Figure 100 Collection of Mechatronic agents: user-supplier direct trade
2. The Mechatronic Agent Provider act as an intermediary
between suppliers and users. In this scenario the MA
provider might be seen as a value adding reseller that can
provide different services for the end-user: from indexing of
all the available modules for a given skill, to consultancy on
defining the most suitable hardware to deliver a specific
task. In this scheme the risk of owning the elements is on
the suppliers (see following Figure 101)
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
End-user/Workstation Supplier
Workstation
Modules
Modules
Module
Supplier 1
Modules
...
Modules
Module
Supplier 2
Modules
Modules
Module
Supplier n
Suppliers’ Risk
Modules
Modules
Modules
Mechtronic Agent Provider
Figure 101 Collection of Mechatronic agents: MA provider with suppliers’ risk
3. The last scenario is analogous to the previous one but this
time the risk of owning the EPS elements is on the MA
provider. This increases the financial exposition and
connected risk but it increases the responsiveness and
technical knowhow of such a stakeholder. The following
Figure 102 portrays the described approach.
234
Chapter 5. Business Models for an EPS
End-user/Workstation Supplier
Workstation
Modules
Modules
Modules
Modules
Modules
Modules
Modules
Modules
Mechtronic Agent Provider
Module
Supplier 1
Module
Supplier 2
...
Provider’s Risk
Modules
Module
Supplier n
Figure 102 Collection of Mechatronic agents: MA provider with own risk
The previous three figures present, respectively, the option of
direct trade (Figure 100), provider with supplier’s risk (Figure 101)
and the provider with own risk (Figure 102) in the particular case of
the collecting EPS production modules to build an assembly
workstation. The same three alternatives can be applied to the
purchase of EPS platform units as well as of the Multi-Agent System.
The logical first activity of a provider of general purpose
elements is to create and keep up to date an offer. This is a cyclic
activity which involves periodical surveys and indexing of all the
elements available on the market with the aim of identifying the
commercially interesting ones. Once the content of the intended
offer is built, two possibilities open for the MA provider: (1) build a
catalogue in agreement with the actual equipment supplier or (2)
purchase the interesting equipment and building an actual
235
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
repository with quick access for the users. The former scenario
makes the business model of the MA Provider similar to the one of a
multi-brand reseller. The latter scenario is analogous to owning one of
the external repositories in a virtual repository such as the one
described in § 5.3.1.1.1 and portrayed in Figure 79. The resulting
graphical representation of the described activity is summarized in
the following Figure 103.
Creation and
maintenance of a
skill/equipment
offer
Generic
platform units
description
Generic
production
module
description
Identifying the
generic skills/
equipment available
on the market
Skill/equipment
available on the
market
Building and maintaining
a catalogue
of the skill/equipment
Building and maintaining
repository
of the skill/equipment
Skill/
equipment
offer: actual
repository
Skill/
equipment
offer:
catalogue
Figure 103 Creation and maintenance of a skill/equipment offer: graphical
representation
236
Chapter 5. Business Models for an EPS
The EPS elements included in the above described offer must
reach their final customers. Providing such building blocks can be
simply done by collecting demands, matching them with the
availability and putting in place the necessary logistics. It can also
include value adding activities such as technical consultancy on the
hardware available. The following Figure 104 represents this latter
case where the skill/equipment suitable for the task is chosen by the
MA provider after an analysis of the End-user’s requirement in
relation to the offer.
Providing the
Mechatronic
Agents for the EPS
Comp.skills
concep. equip.
embodiment
Matching required
skills with generic
skills available
Skill/equipment
available for the
specific task
Skill/equipment
offer
Transferring the required
skill/equipment from the
supplier to the user with
supplier risk
Transferring the required
skill/equipment from the
supplier to the user with
own risk
Production skill/
equipment
where needed
Figure 104 Providing the Mechatronic Agents for the EPS: graphical
representation
237
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Maintenance of the provided Mechatronic Agents can be granted
directly by the MA provider or with the help of external Technical
expertise (see Figure 105). The former scenario suits the MA
providers which have their own repository, while the latter is likely
to be required in case of the MA provider acts as a simple reseller.
Production
feedback
Providing
maintenance for the
Mechatronic Agents
Maintained EPS
Technical
expertise
Figure 105 Providing maintenance for Mechatronic Agents: graphical
representation
Finally the EPS building blocks can be used throughout several
production cycles. As all the general purpose industrial pieces of
equipment such as robots or machine tools they have a high residual
value. Thus it is likely that the process of transferring them among
different users might foster interesting business opportunities. The
previous section of the analysis has already shown how different
end-users can share the resources in a coopetition agreement (see
Figure 79). When the end-users are not partners the transfer of the
redundant EPS elements can once again follow a direct trade scheme
among them. Otherwise the MA provider can be involved simply by
matching the demand and offer, or directly taking back the elements
in its own repository (see Figure 106).
238
Chapter 5. Business Models for an EPS
End-user 1
End-user 2
EPS
EPS
Modules
Modules
...
Modules
Modules
Modules
Modules
EPS
Modules
Mechtronic Agent Provider
Own Repository
Modules
Modules
End-user n
Figure 106 Own repository for the transfer of EPS elements among different endusers
Finally a graphical representation of the described activity is
presented in figure 107 as follows.
239
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Transferring the
Skill/equipment
among different
End-users
No longer
needed
production
equipment
Transfer of
skill/equipment with
own risk
Transfer of
skill/equipment with
user risk (virtual
repository)
Production
skill/equipment
where needed
Production
skill/equipment in
the own repository
Figure 107 Transferring the Skill/equipment among different end-users:
graphical representation
240
Chapter 5. Business Models for an EPS
The Mechatronic Agents Provider’s complex network of
relationships with the other EPS stakeholders is summarized in the
following Table 13.
MECHATRONIC AGENT PROVIDER
Stakeholders
Relationships description
End-user
 Joined analysis of the intended workflow to
devise suitable component to deliver it.
 Purchases the EPS production modules and
EPS platform units necessary to deliver the
given workflow
Multi-Agent
System
Supplier
 Gives the license to sell MAS or part of it
 the mechatronic agents sold include the MultiAgent System
Platform
Supplier
 give the license to sell the EPS platform units
 sells the EPS platform units
Module
Supplier
 give the license to sell the EPS production
module
 sells the EPS production modules
Table 13 Summary of the relationships among the MA provider and the
other EPS stakeholders
This paragraph features a set of Tables (from Table 16 to Table
21) which summarizes the individuated activities and related
resources for all the stakeholders. Such activities are numbered with
the same ascending order throughout all the aforementioned tables
which, thus, can be read as a unique object. For each activity the
related Value Configuration is also reported. In the final part of this
241
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
section figure 108 introduces the graphical summary of the tables’
content. Each resource is given a two letter code which together with
the numbers assigned to the activities allows a clearer graphical
representation. Finally, the following Table 14 and Table 15
introduce the abbreviations used for the denomination of
stakeholders and the value configuration respectively.
EU
WS
MAS
PL
MO
MAP
Stakeholder
End User
Workstation Supplier
Multi-Agent Supplier
Platform Supplier
Module Supplier
Mechatronic Agent Provider
Table 14 Abbreviations for the stakeholders' denominations
VC
VS
VN
Value Configuration
Value Chain
Value Shop
Value Network
Table 15 Abbreviations for the Value Configurations' denominations
242
END USER
Activity
Input /Resource (code) From: Output/Resource (code) To:
1. Creation of the workflow
1.1. Analysis of the given
product
1.2. Formulation of the list of
required skills
1.3. Formulation of the
assembly process workflow
2. Continuous improvement of the
current workflow
Value
Conf.
VC
Product Design (AA)
Assembly process
requirement (AB)
EPS models and languages
(BJ)
EU
VS
Required skills (AC)
EU
VS
Assembly process
workflow (AD)
EU
VS
Design of the new
workflow (AF)
EU
VS
Maintained assembly
process workflow
EU
VS
EU
Production feedback (AE)
EU
MAP
PL
MO
3. Maintenance of the workflow
Production feedback (AE)
EU
EU
Required skills (AC)
New production
equipment description
(AG)
Assembly process
requirement (AB)
EU
243
244
4. Configuration of a Workstation
4.1. Analysis of the composite
skill
4.2. Formulation of the
composite skill conceptual
equipment embodiment
4.3. Allocation of the skills on
the available resources
4.4. Collection of the necessary
modules
VC
Required skill (AC)
Requirement for the
embodiment of the
composite skill into
equipment (AH)
Skill/equipment available
for the specific task (AJ)
[description]
EU
Requirement for the
embodiment of the
composite skill into
equipment (AH)
EU
VS
EU
Composite skill conceptual
equipment embodiment
(AI)
EU
VS
Map skills to equipment
(AK)
EU
VS
EPS production Modules
(AJ)
EU
VC
MAP
MO
EU
Composite skill
conceptual equipment
embodiment (AI)
EU
Map skill to equipment
(AK)
EU
Available EPS production
Modules (AJ)
MO
MAP
EU
4.5. Integration of the
workstation
5. Maintenance of the workstation
EPS production Modules
(AJ)
EPS Multi-Agent System
(AU)
Schedule of the
maintenance (AM)
Production feedback (AE)
EU
Assembly Workstation (AL)
EU
VC
Maintained Workstation
(AN)
EU
VS
MAS
EU
EU
6. Renewal of the workstation
VC
6.1. Analysis for the continuous
improvement of the WS’
skill
Industrial standard
New technologies (AO)
6.2. Reconfiguration of the
workstation (analogous to
activity 4. Configuration of
a workstation)
New requirement for the
embodiment of the
composite skill into
equipment (AP)
EU
Additional Modules (AJ)
MO
MAP
EU
-
New requirement for the
embodiment of the
composite skill into
equipment (AP)
EU
VS
New Assembly
Workstation (AQ)
EU
VS
245
246
7. Creation of the EPS
7.1. Formulation of the general
system requirement
VC
Assembly Process
Workflow (AD)
Market requirements (AR)
7.2. Collection of the necessary
building blocks
Assembly Process
Workflow (AD)
Platform units (AT)
7.3. Deployment of the EPS
Assembly Workstation
(AL)
EPS Multi-Agent System
(AU)
General system
requirement (AS)
EPS elements (AV)
EU
-
General system
requirement (AS)
EU
VS
EPS elements (AV)
EU
VC
Deployed EPS (AW)
EU
VC
New general system
requirements (AX)
EU
VS
EU
PL
EU
EU
WS
MAS
EU
EU
8. Renewal of the EPS
8.1. Analysis of the modified
Workflow and comparison
with current workflow
Current Assembly process
workflows (AD)
New Assembly process
workflows
EU
EU
8.2. Collection of the required
additional building blocks
8.3. Redeployment of the EPS
New Assembly process
workflows (AF)
Additional Platform units
(AT)
Additional Assembly
Workstation (AL)
General system
requirement (AY)
EU
PL
EPS elements (AV)
EU
VC
Redeployed EPS (AY)
EU
VC
EU
WS
EU
EPS elements (AV)
EU
9. Run the production
Assembly process
workflow (AD)
EU
Deployed EPS (AW)
EU
EU
WS
MO
Production feedback (AE)
PL
MAP
MAS
Table 16 Overview of the activities and resources of the End-user
247
248
WORKSTATION SUPPLIER
Activity
Input /Resource (code) From: Output/Resource (code) To:
10. Configuration of a Workstation
10.1.
Analysis of the
related composite skill
10.2.
Formulation of the
composite skill conceptual
equipment embodiment
10.3.
Allocation of the skills
on the available resources
10.4.
Collection of the
necessary modules
VConf
VC
Required skill (AC)
Requirement for the
embodiment of the
composite skill into
equipment (AH)
Skill/equipment available
for the specific task (AJ)
[description]
Composite skill
conceptual equipment
embodiment (AI)
Map skill to equipment
(AK)
Available EPS Production
Modules (AJ)
EU
Requirement for the
embodiment of the
composite skill into
equipment (AH)
WS
VS
WS
Composite skill conceptual
equipment embodiment
(AI)
WS
VS
Map skill to equipment
(AK)
WS
VS
EPS Production Modules
(AJ)
WS
VC
MAP
MO
WS
WS
WS
MO
MAP
10.5.
Integration of the
Workstation
11. Maintenance of the workstation
Modules (AJ)
EPS Multi-Agent System
(AU)
Schedule of the
maintenance (AM)
Production feedback (AE)
WS
Assembly Workstation (AL)
EU
VC
Maintained Workstation
(AN)
EU
VS
MAP
WS
EU
12. Renewal of the workstation
12.1.
Analysis for the
continuous improvement
of the WS’ skill
12.2.
Reconfiguration of
the workstation (analogous
to activity 9. Configuration
of a workstation)
VC
Industrial standard
New technologies (AO)
New requirement for the
embodiment of the
composite skill into
equipment (AP)
Additional Modules
-
New requirement for the
embodiment of the
composite skill into
equipment (AP)
EU
VS
New Assembly Workstation
(AQ)
EU
VS
EU
MO
MAP
WS
Table 17 Overview of the activities and resources of the Workstation supplier
249
250
MULTI-AGENT SYSTEM SUPPLIER
Activity
13. Creation of the EPS Multi-Agent
System
13.1.
Assessment of the
average customer needs
13.2.
Design of the EPS
Multi-Agent System
13.3.
Coding of the EPS
Multi-Agent System
14. Renewal of the EPS
Multi-Agent System
14.1.
Collection of the
additional requirements
Input /Resource (code) From: Output/Resource (code) To:
VConf
VS
Market analysis (AZ)
MAS
Industrial standards
EPS standards (BB)
-
Conceptual design of the
EPS Multi-Agent System
(BA)
-
EPS Multi-Agent System’s
final design (BC)
MAS
Conceptual design of the
EPS Multi-Agent System MAS
(BA)
VS
EPS Multi-Agent System’s
MAS
final design (BC)
VS
EU
MO
PL
VS
EPS Multi-Agent System
(AU)
VS
New industrial standard
New EPS standards (BD)
-
List of additional required
MAS
functionalities (BE)
VC+VS
14.2.
Design of the EPS
Multi-Agent System
additional functionalities
14.3.
Coding of the EPS
Multi-Agent System
additional functionalities
15. Maintenance of the EPS
Multi-Agent System
15.1.
Scheduled
maintenance activities
15.2.
Reactive maintenance
activities
List of additional required
functionalities (BE)
MAS
Design of the renewed EPS
MAS
MAS (BF)
VS
Design of the renewed
EPS MAS (BF)
MAS
Renewed EPS MAS (BG)
EU
MO
PL
VS
Maintenance plan
MAS
Maintained EPS MultiAgent System
Production feedback (AE)
EU
PL
MO
Maintained EPS MultiAgent System
Table 18 Overview of the activities and resources of the Multi-Agent System supplier
EU
MO
PL
EU
MO
PL
VC
VS
251
252
PLATFORM SUPPLIER
Activity
Input /Resource (code) From: Output/Resource (code) To:
VConf
16. Creation of EPS platform units
16.1.
Assessment of the
average customer needs
16.2.
Translation in a
generic transport skill
16.3.
Design of the
platform unit
16.4.
Manufacturing of the
platform unit
17. Maintenance of the platform
unit
Market analysis (BH)
Conceptual design of the
EPS platform unit (BI)
EPS models and
languages (BJ)
Generic transport skill
description (BK)
Industrial standards
EPS standards (BL)
EPS Multi-Agent System
(AU)
Platform unit’s final
design (BM)
Production Feedback (AE)
PL
PL
PL
MAS
PL
EU
MAP
Conceptual design of the
EPS platform unit (BI)
PL
VS
Generic transport skill
description (BK)
PL
VS
Platform unit’s final design
(BM)
PL
VS
EPS platform unit (AT)
Manufacturing Feedback
(BN)
Maintained platform unit
(BO)
Table 19 Overview of the activities and resources of the Platform supplier
EU
MAP
PL
MAS
EU
MAP
VC
VS
MODULE SUPPLIER
Activity
Input /Resource (code) From: Output/Resource (code) To:
18. Creation of an EPS prod. module
18.1.
Assessment of the
average customer needs
18.2.
Translation in a
generic manufacturing skill
18.3.
Design of the
production module
18.4.
Manufacturing of the
production module
19. Maintenance of the production
module
Market analysis (BP)
Conceptual design of the
EPS prod. module (BQ)
EPS models and
languages (BJ)
Generic manufacturing
skill description (BR)
Industrial standards
EPS standards (BS)
EPS Multi-Agent System
(AU)
MO
MO
MO
-
VConf
Conceptual design of the
EPS prod. module (BQ)
MO
VS
Generic manufacturing skill
description (BR)
MO
VS
Production module’s
final design (BT)
MO
VS
MAS
EPS production module
(AJ)
Production module’s
final design (BT)
MO
Manufacturing feedback
(BU)
Production Feedback (AE)
EU
WS
MAP
Maintained production
module (BV)
253
Table 20 Overview of the activities and resources of the Module supplier
EU
WS
MAP
MO
MAS
EU
WS
MAP
VC
VS
254
MECHATRONIC AGENT PROVIDER
Activity
Input /Resource (code) From: Output/Resource (code) To:
20. Creation and maintenance of a
skill/equipment offer
20.1.
Identifying the
generic skills/equipment
available on the market
VConf
VS
Generic platform unit
description (AT)
Generic manufacturing
module description (AJ)
PL
MO
Skill/equipment available
MAP
on the market (BW)
VS
20.2.
Building and
maintaining a catalogue
(virtual repository) of the
skill/equipment
Skill/equipment available
on the market (BW)
MAP
Skill/equipment offer:
virtual repository or
aggregated catalogue (BX)
EU
WS
VN
20.3.
Building and
maintaining a repository of
the skill/equipment
Skill/equipment available
on the market (BW)
MAP
Skill/equipment offer:
actual repository (BY)
EU
WS
VS
21. Providing the Mechatronic
Agents for the EPS
21.1.
Matching required
skills with generic skills
available
21.2.
Transferring the
required skill/equipment
from the supplier to the
user with supplier risk
21.3.
Transferring the
required skill/equipment
from the supplier to the
user with own risk
22. Providing maintenance for the
Mechatronic Agents
Composite skill
conceptual equipment
embodiment (BZ)
EU
WS
Skill/equipment offer
(BX-BY)
MAP
Skill/equipment available
for the specific task (CA)
Skill/equipment available
for the specific task (CA)
EU
WS
VS
MO
PL
Production skill/equipment
where needed (CB)
EU
WS
VN or
VC
Skill/equipment available
for the specific task (CA)
MAP
Production skill/equipment
where needed (CB)
EU
WS
VC
Production feedback (AE)
EU
Maintained EPS (CD)
EU
WS
VN o
VC
Technical expertise (CC)
MAP
PL
MO
255
256
23. Transferring the Skill/equipment
among different End-users
23.1.
Transfer of
skill/equipment with user
risk (virtual repository)
23.2.
Transfer of
skill/equipment with own
risk
No longer needed
production equipment
(CE)
No longer needed
production equipment
(CE)
EU
Production skill/equipment
where needed (CF)
EU
WS
VN
EU
Production skill/equipment EU
where needed (CF) WS
Production skill/equipment
MAP
in the own repository (CG)
VC
Table 21 Overview of the activities and resources of the Mechatronic Agent provider
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Platform Supplier
Multi-Agent System Supplier
13
AZ
BA
13.1
BD
BF
14.2
13.3
BH
BE
14.1
BC
13.2
BB
16
14
14.3
AU
BJ
16.2
BK
BL
16.3
BM
16.4
AU
BG
BI
16.1
BN
AT
End-user
Module Supplier
18
BP
Workstation Supplier
4-(10)
BQ
18.1
AC
BJ
18.2
BR
BS
18.3
BT
4.2
AI
AJ
4.3
AK
AJ
4.4
AJ
AU
4.5
Description
18.4
AU
BU
AJ
AH
4.1
6-12
AO
AP
6.1
6.2
AJ
AQ
AL
7
AR
AD
AL
AU
AT
1
AA
AS
7.1
1.2
BJ
7.3
8
AC
AF
AD
AL
AT
8.1
AX
8.3
1.3
AV
7.2
AD
AB
1.1
AV
8.2
AY
Platform
Supplier
Module
Supplier
AD
AW
20
AT
AJ
AE
AE
9
AG
21
20.1
BW
BZ
BX-Y
23
21.1
20.2
21.2
20.3
21.3
BY
AF
2
CA
CE
23.2
23.1
CF
CB
CG
New End-user
AW
BX
Mechatronic agent Provider
Figure 108 Graphical summary of the relevant activities and resources of the
EPS stakeholders
257
Chapter 5. Business Models for an EPS
As mentioned above, the content of the tables presented is
graphically summarized in the previous Figure 108. In order to
provide a readable image the less relevant activities concerned with
the maintenance of the different elements have been left out.
Besides, the connections between the Platform Supplier and the
Mechatronic Agent Provider and between the Module Supplier and
again the Mechatronic Agent Provider have been simplified (see
lower part of the figure).
While the previous section disclosed the way EPS’s stakeholders
add value to the system, this paragraph aims at describing how they
generate money out of it. Capturing the value is, in fact, together
with describing and creating it the last of the three activities which
underpin a business model. In order to encompass all the aspects
related with the process of capturing the value created, this work
has introduced the concept of Architecture of the Revenue. Such a
construct aims at describing the mechanisms that generate revenues
for a generic supplier engaged in a business relationship with a user.
The literature review has disclosed three main elements which
need to be assessed in order to characterize the aforementioned
process. In detail:
1. Money. It represents the flow of cash or other valuable
mean from the user to the supplier.
2. Interfacing economic activity. This is the specific supplier’s
activity that generates the value stream.
3. Pricing method. This is the method used to establish the
price of the good or service supplied.
258
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Figure 109 presents the graphical notation for the Architecture of
the Revenue.
Money
Interfacing Economic Activity
User
Supplier
Architecture of the
Revenue
Pricing Method
Figure 109 Graphical notation for the Architecture of the Revenue
For each one of the possible interactions individuated in the
previous paragraph the related Architecture of the Revenue is
hereby characterized. In particular, the principle behind the
interfacing economic activity and the applicable pricing methods are
individuated and discussed. A list of all the possible interfacing
economic activities and pricing methods considered in this
dissertation is introduced in the following Table 22 and Table 23.
Interfacing economic activities
Selling
Lending
Licensing
Transaction Cut
Advertising
Table 22 List of the interfacing economic activities
259
Chapter 5. Business Models for an EPS
Pricing Methods
Fixed Pricing
Pay-per-use
Subscription
List/Menu price
Differential Pricing
Product feature dependent
Customer
characteristic
dependent
Volume dependent
Value-based
Market Pricing
Bargaining
Yield management
Auction
Reverse auction
Table 23 List of the pricing methods
A more extensive description of the economic activities and
pricing methods is provided in § 2.3.3.3.3.
The previous § 5.3.1 has introduced the activities and resources
that lead to the creation of the value associated with an EPS. In order
to create the value locked in their own value offering most of the
EPS stakeholders need input from other stakeholders. In view of this
the previous chapter has also portrayed the consequent network of
relationships. Such value creation networks define all the contact
points among EPS stakeholders. The characterization of the
Architecture of the Revenue for each one of the identified liaisons is
presented in the following paragraph as the last step toward the
complete definition of the EPS business models. Finally, as usual in
this work, the last sub-sections introduce a synthetic overview of the
relevant findings.
260
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The following Table 24 summarized all the identified “supplieruser” relationships within the EPS value creation network.
User
End-User
WS
supplier
MA
provider
Platform
supplier
Module
supplier
12
13
MAS
Supplier
Supplier
End-User
WS
supplier
1
MA
provider
2
Platform
supplier
3
Module
supplier
4
7
10
MAS
Supplier
5
8
11
6
9
Table 24 The EPS value creation network: summary of the active “supplier-user”
relationships
The identified liaisons are associated with a numeric index that
defines the order used in the following part of this work to describe
them. Such numbers are also represented in the following Figure 110
which provides a graphic summary of the links exploiting the
formal notation for the Architecture of the Revenue (see Figure 109).
The individuated relationships cover the six business models taken
independently as well as the combination of them introduced when
describing the activities connected with the creation of the value. So
there are hybrids module suppliers that sell their products directly
to the end user and so on. In this work the name of the supplier is
conventionally put before the name of the user when indicating a
261
Chapter 5. Business Models for an EPS
business relationship. The link number [1] is consequently referred
to as WS supplier-End-user.
EPS
5
12
Platform supplier
3
11
MA provider
2
End-user
MAS supplier
9
6
WS supplier
8
10
13
1
7
Module supplier
4
Figure 110 Graphical layout of the Architectures of the Revenue in the EPS value
creation network
WS supplier-End-user. According with the outcome of the
previous sections of this work, in the EPS domain, the creation of the
assembly workstations can be carried on by either the end-user or by
a specialized firm: the WS supplier. Such stakeholder supplies the
262
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
workstations that for technological or opportunity reasons the enduser does not realize in-house. Being a configured, process specific,
element the residual value of the workstation is composed of:


Configuration costs: the cost of putting the workstation
together for a given task. This cost is directly linked to the
process to be delivered. Assuming that the process itself has
value only for the current end-user such cost must be
allocated entirely on the customer.
Component costs: the building blocks of a workstation are the
EPS production modules. Such elements hold a very general
purpose so they have a high residual value. Consequently,
the cost of these must be allocated on the end-user in relation
to the fraction of the useful lifetime of the modules that is
exploited by such installations.
In view of this the most suitable interfacing economic activity is
lending: this in fact allows the WS supplier of reusing the
components for new installations. Selling can also be considered in
case the expected production cycle for the workstation equals or
exceeds the useful lifetime of the composing EPS modules. In
general the selling activity is suited to all the situations where it is
not possible to assess the residual value of the equipment. Finally,
being a configurable object the workstation creation must be priced
individually according with the specific features. Of course in case
the EPS modules are returned the logic of pricing must account for
the actual use as well, as in a pay-per-use scheme. Other pricing
methods are not applicable.
MA provider-End-user and MA provider-WS supplier. These two
relationships are analogous with the only difference that in the
former one the elements purchased are EPS platform units, EP
production modules and EPS Multi-Agent System whereas in the
latter one there is only trade of EPS production modules. The
previous analysis has characterized the Mechatronic Agent provider
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Chapter 5. Business Models for an EPS
in two different ways: (1) as a simple reseller of the elements, (2) as
an intermediate, qualified, owner of the elements. This classification
effects, of course, the related Architecture of the Revenues. In the
scenario (1) the MA provider gets a transaction cut from the
purchase and the consequent pricing mechanism is determined by
the original supplier of the element: it can be a list price for fully
featured Mechatronic Agents or a fixed subscription fee for software
elements like the MAS. Further services (such as consultancy or
customer support) which the MA provider might add to the offer
are the driver to determine the suitable transaction cut.
In the scenario (2) the Mechatronic-Agent supplier buys the
ownership, or the exclusive right to sell products manufactured by
other stakeholders. The related Architecture of the Revenue is
therefore analogous to the one for the relationships Platform
Supplier-End-User, Module Supplier-End-user and Module SupplierWS-supplier. For the general purpose EPS building blocks the
interfacing economic activity can be lending if the elements yield a
high residual value or selling when such residual value cannot be
assessed. The related pricing method can be pay-per-use or list price
if the full ownership is transferred. The MAS has been left out of this
scenario because it is not likely that the supplier of this element
gives away the full ownership of it.
MAS supplier-End-user, MAS supplier- WS supplier, MAS
supplier-Platform Supplier and MAS supplier-Module supplier. The
process of purchasing of the MAS system is analogous to the one of
purchasing an operative system for a personal computer. Given the
heavy requirement in term of expected performance along with the
internal strategic reason of each OEM the “open-source” business
model has not been considered in this analysis. Consequently the
MAS supplier only provides the right to use the software, but not
the one of modifying it. The interfacing economic activity is then
licensing. The Multi-Agent System is a modular object which
includes different tools: the price must be based on the required
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
product features and cashed through a subscription fee. Such
subscription might or might not cover maintenance and software
update: in the latter case the prices for such services can be
established according to the entity of the related activities.
MAS supplier-MA provider. Once again this relationship
involves two possible scenarios: (1) the MA provider is a reseller of
Mechatronic Agents and (2) he is the actual owner of it. The second
scenario is analogous to the one just described above, while the
former differs only for the interfacing economic activity which is in
such cases a transaction cut.
Platform supplier-MA provider and Module supplier-MA
provider. When the MA provider acts as a simple reseller of the EPS
building block the actual suppliers give the license to trade their
product. The MA provider retains a transaction cut on the normal
pricing methods applied between suppliers and end-users: pay-peruse or list pricing. In case the MA provider is the owner of the
elements then the Architecture of the Revenues are analogous to the
ones applied in the relationships Platform supplier-End-user and
Module supplier-End-user.
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Chapter 5. Business Models for an EPS
The following Table 25 provides a summary of the findings
regarding the Architectures of the Revenue associated with the EPS
value network.
Relationship
1
WS
User
Supplier
ID
Interfacing
Economic Activity:
<favorite> and <others>
Lending
Selling
EU
Pricing Method:
<favorite> and <others>
Configuration
Product Feature
Dependent
Building blocks
Pay-per-use
Software
Reseller1 Tansaction cut Reseller
2
MAP
EU
Subscription
Mech.Agents
List price
Owner5
Lending
Selling
Owner
Pay-per-use
List price
3
PL
EU
Lending
Selling
Pay-per-use
List price
4
MO
EU
Lending
Selling
Pay-per-use
List price
5
MAS
EU
Licensing
Product Feature
Dependent
Subscription
1
266
Referred to the Mechatronic Agent provider
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Reseller Transaction cut Reseller
6
MAP
List Price
WS
Qualified
Owner
Lending
Selling
Qualified
Owner
Pay-per-use
7
MO
WS
Lending
Selling
Pay-per-use
List price
8
MAS
WS
Licensing
Product Feature
Dependent
Subscription
9
10
11
PL
MO
MAS
Reseller
Licensing
Reseller
Pay-per-use
List price
Owner
Lending
Selling
Owner
Pay-per-use
List price
Reseller
Licensing
Reseller
Pay-per-use
List price
Owner
Lending
Selling
Owner
Pay-per-use
List price
MAP
MAP
Product Feature
Reseller Transaction Cut Reseller
Dependent
Subscription
MAP
Product Feature
Owner
Licensing
Owner
Dependent
Subscription
12
MAS
PL
Licensing
Product Feature
Dependent
Subscription
13
MAS
MO
Licensing
Product Feature
Dependent
Subscription
Table 25 Summary of the Architecture of the Revenue in the EPS value
network
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Chapter 5. Business Models for an EPS
This chapter proposes a set of business models able to support
the development of an Evolvable Production System. In particular,
starting from the definition of the EPS Value offering provided by
the analysis in Chapter 4, this section presents a thorough
description of the two remaining elements of a business model for
each one of the aforementioned
s: the Value Configuration and
the Architecture of the Revenue. The former element is connected
with the process of creating the defined potential value whereas the
latter encompasses the constructs connected with capturing such
value.
The Value Configuration has been presented through the
identification of all the activities and resources connected with the
creation of each aggregated value offering. The nature of the
interaction among such activities allowed disclosing for each potential
stakeholder the suitable Value Configuration among value chain
(focus on delivering product/services), value shop (focus on problem
solving) or value networking (focus in bringing together customers).
The envisaged collection of EPS stakeholders captures the value
created through a network of internal supplier-user interactions. For
each one of the identified interactions chapter 5 presents a detailed
description of the related Architecture of the Revenue. In particular,
for each envisaged liaison among stakeholders the necessary
interfacing economic activity and the consequent pricing mechanism
have been introduced and portrayed.
268
Traditionally the validation of a business model is a cyclic
activity based on the feedback of the potential envisaged customers.
The analysis is aimed at proving the fitness of a business model
before investing and bringing it to the market. The methods used for
such scrutiny are based on finding the answer to the following two
questions:
 Is the customer willing to pay for the value proposition underlying
the examined business model? This is a qualitative question
that can reveal the appeal of the value proposition on the
target market. Any business model which is based on a nonattractive value proposition is doomed to fail.
 Is the price that the customer is willing to pay sufficient to cover
the cost of creating and capturing such value and to generate
profits? This is a quantitative question that can disclose the
effectiveness of the envisaged business model.
The following Figure 111 shows the relationship among the
depicted issues and the definition of business model that underpins
this work.
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Chapter 6. Illustration and Validity of the Results
Relevant for
the customer?
Proposition
Value
Business Model
Technological Input
Creation
Capturing
}
Effective
enough?!?
Economic Output
Figure 111 Business model’s validation approach
As already widely discussed along the dissertation, the
questions above do not really apply to the EPS business models
introduced hereby. This is due to the fact that the evolvable
paradigm has not yet reached a marketable level of maturity, thus it
is not possible to transform the envisaged technological input in
actual economic output. In other words there are no customers
potentially interested in the technology as it is. In such given context
providing an exhaustive answer to such questions would require an
enormous set of assumptions which will, in turn, compromise the
logic construction of the related proof of concept.
In consequence, the aim of this chapter is to illustrate how the
provided models can be used to target the depicted problem of
assessing the validity of the business model of a not fully mature
technology such as EPS. A substantial support to this purpose comes
from the research experience matured in the EPS domain. The
process of building systems able to demonstrate in practice the
theorized construct related with the evolvable paradigm, offers a
limited, yet meaningful, opportunity to investigate the
aforementioned problems.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The IDEAS pre-demonstrator (hence also Pre-D) is, while writing
this thesis, the most advanced semi-industrial embodiment of the
evolvable paradigm, which renders it the most suited system for a
validation of the hypotheses proposed in this dissertation.
Nevertheless, given the particular background and purpose that
have steered its development the provided proof of concept can only
cover a limited part of the developed body of knowledge. The
organizations sharing this endeavor have, in fact, put in place their
different competencies as they would do for a normal industrial
project but they cannot be considered as business partners because
their relationships were not driven by the expected profits, but
rather by joined research interests.
In view of this, there is no meaningful track of quantitative data
that can mimic the behavior of the system’s stakeholders in a
competitive environment but a careful analysis of the input and
output of the pre-demonstrator’s activities can disclose enough
information to provide, in turn, a clear indication about the
applicability and the validity’s conditions of the proposed business
models. The remaining part of this paragraph briefly introduces the
actual Pre-D target and enlightens consequently the inherent
limitations of such an approach.
The activities performed during the development of the predemonstrator where only aimed at quickly realizing a system able to
run a preliminary version of the IDEAS Multi-Agent System which
could, in turn, validate the envisaged Multi-Agent Architecture
through advanced functionalities such as the plug and produce
271
Chapter 6. Illustration and Validity of the Results
concept1. In view of this, the creation phase itself has been mostly
focused on development of the necessary software whereas the
hardware has been obtained through the integration of suitable
legacy equipment. Besides, given the purpose of such systems, the
intended use was limited to a simple single set of fictional
operations that yield a significant set of required communications
among the different Mechatronic Agents featured by the system.
The Pre-D has only been used in its original configuration, thus
one can say that its value has not been fully renewed during the
experiments. Nevertheless, as explained in the following section that
details the Pre-D experience, the reconfiguration of the system was a
target of the research effort.
Although the Pre-D has been built and run by different
stakeholders they were all encompassed under the umbrella of the
IDEAS project, which can also be considered as the “end-user” of
this installation. In consequence of this there were neither activities
related with the purchase of goods or services nor ones related to the
transfer of their value. Figure 112 summarizes the described domain
of the pre-demonstrator work in relation with its value proposition’s
lifecycle as defined in this work.
Lifecycle
Creation Purchase
Use
Renewal Transfer
Predemonstrator
Figure 112 Domain of study of the IDEAS pre-demonstrator in relation with a
value proposition’s lifecycle.
In conclusion the value proposition of the Pre-D was mostly based on
the research objectives underpinning such work. The economic interests
Such objective was successfully achieved on the 31st of January 2011
during the first attempt at FESTO labs in Esslingen, Germany.
1
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
that instead drive any industrial development had a marginal role in
building the total value proposition of this solution. Bearing in mind
these important limitations this chapter extracts the useful
information yielded in the Pre-D demonstration and presents the
related aspects that support the findings of this thesis.
The need to explore, test and validate on a real system the
software architecture developed during the first year of the IDEAS
project is the main reason behind the realization of the IDEAS predemonstrator. Given such context and the limited time available this
installation has not been realized ex-novo but it was obtained
through adaptation of existing hardware available among the
partners of the consortium.
The hardware selected for the Pre-D experience is the MiniProd
system developed by Festo in a previous project. The reasons behind
this choice are several. First, the system is a fully featured table
factory that encompasses all the relevant processes of an automatic
assembly system: handling, internal logistic and assembly
workstation. Furthermore the reduced size of the workstations
which compose this installation allows an easy manipulation of such
building blocks which, in turn, enables a very quick reconfiguration
of the system. This feature of the MiniProd platform has a dramatic
impact on the intended demonstration scenario for the plug and
produce concept. Finally, the envisaged work required to adapt
MiniProd into a system compliant with the evolvable paradigm was
reduced if compared to other options. The only major adjustment
the project envisaged was related to the change of the control logic
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Chapter 6. Illustration and Validity of the Results
from a traditionally centralized approach based on a PLC to a
distributed one based on tiny controller deployed in each assembly
workstation, and the associated advanced interfaces.
The controllers chosen for such purpose are the so called Combo
200, a commercial product from Elrest (another industrial partner of
the IDEAS project). The following part of this paragraph introduces
a conceptual description of the aforementioned legacy components
as well as a summary of the processes that brought them together.
Such information is summarized for the reader because it plays an
important role in the following Pre-D business characterization
which, in turn, underpins the presented proof of concept.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The following Figure 113 provides an overview of the MiniProd
system.
Figure 113 Overview of the MiniProd system
The system is composed of a series of elements that deliver all
the basic functions of an automatic production system. The founding
component of this installation is a table on which the load/unload
station as well as all the working stations are located. The logistic
among these points is ensured by two independently moving
carriers that together with the aforementioned table form the
MiniProd transport system. Figure 114 displays these pieces of
275
Chapter 6. Illustration and Validity of the Results
hardware. In view of this, such system can be described as a multi
carrier planar direct drive system. Note: the novel approach used to
the logistics in MiniProd led to an extensive re-evaluation of the
associated agent, the Transport Agent.
Figure 114 IDEAS Pre-demonstrator: the transportation system
Along with being an active part of the transportation system the
table also offers five slots for the allocation of workstations able to
deliver a specific process to the product on the carrier. The following
Figure 115 shows a configuration where the 3 assembly workstations
used for the demonstration scenario are deployed in the system. In
detail: a gluing unit, a pick&place unit and an electrical testing unit.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Figure 115 IDEAS pre-demonstrator: the assembly workstations
The last element is the stacker system which regulates the
material flow. This element is composed of: (1) a rotational
pick&place mechanism for loading and unloading the work carriers
and (2) two storages, one for the unprocessed product fixtures to be
loaded on the carrier and the other for the finished product to be
unloaded from the carrier after the workflow is terminated. Figure
116 displays such elements.
277
Chapter 6. Illustration and Validity of the Results
Figure 116 IDEAS pre-demonstrator: the stacker unit
The tiny controllers used in the IDEAS project are the
commercially available Combo200 (see Figure 117). A full technical
description of the whole family of combo controllers can be found at
(ELREST)
Figure 117 Combo200 from ELREST
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The process that brought the MiniProd from the described
legacy component to a set of mechatronic agents able to support the
preliminary IDEAS Multi-Agent architecture is composed of two
clusters of activities: (1) the hardware preparation and (2) the
development and implementation of specific software tools for the
definition and utilization of the mechatronic agents themselves.
During the hardware preparation the assembly workstations
previously controlled by the main PLC mounted on the MiniProd
were endowed with a Combo 200 and of all the related new
interfaces that allow each one of them to embody a mechatronic
resource agent. As seen above, these tiny controllers offer multiple
I/Os for communicating with the hardware and they have the
possibility of running Jade, the language used for the agent
development. The following Figure 118 presents the naked
workstations with the new controllers installed.
Figure 118 IDEAS pre-demonstrator: hardware representation of the mechatronic
resource agents
The stacker unit was also agentified by exploiting a Combo
device while due to technological and time constraints the two
279
Chapter 6. Illustration and Validity of the Results
carriers have been controlled through a normal PC platform. Finally,
the IDEAS Multi-Agent System was granted access to all the
hardware through the development of specific software libraries
embedded in the respective controllers. In conclusion this first phase
delivered a completely new system composed of self-containing
entities which can run without central control structures.
The second cluster of activities produced a set of tools that
enabled the definition and configuration of the mechatronic agents
and of the target processes. A wider characterization of such tools
can be found in (IDEAS-Deliverable2.3, 2012): for the purpose of this
dissertation it is enough to shortly introduce their main functions
and interactions. In view of this, Figure 119 introduces an overview
of the components that foster the IDEAS module integration and
consequent process implementation.
Mechatronic
System
Configurator
Mechatronic
Process
Configurator
Product Agent
Agent Editor
Resource Agent
Coalition Agent
Agent Environment
280
Agent
Development
Rapid Module
Integration Environment
Equipment
Equipment
Equipment
Library
Library
Library
Transport Agent
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Figure 119 Overview of the IDEAS Rapid Module Integration Components used
for the pre-demonstrator (adapted from (IDEAS-Deliverable2.3, 2012))
The equipment libraries, provided together with the EPS
modules and platform units, include the physical description of the
HW as well as the necessary interfaces with the related Multi-Agent
based control system. Such libraries are imported through the
Mechatronic System Configurator tool which, consequently,
provides the Agent Editor tool with the input to deploy the
necessary agents in the system. Finally these agents are aggregated
into processes (single workstations and entire EPS) through the
Mechatronic Process Configurator tool which, in turn, enables quick
configuration and reconfiguration of the system.
In reference to the presented business models the equipment
libraries must be developed by the hardware suppliers: such
libraries must be compliant with the intended MAS’ standards. The
end-users and the workstation suppliers exploit all the described
tools belonging to the MAS domain to aggregate the agents’
archetypes.
In order to exploit the IDEAS pre-demonstrator as a case study
for the validation of the work such experience must be read through
the lens of this dissertation’s context. After fulfilling this basic
requirement this paragraph introduces the consequent proof of
concept that underpins the formulated thesis.
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Chapter 6. Illustration and Validity of the Results
The following Figure 120 introduces the IDEAS predemonstrator’s value proposition. The atomic value offerings have
been aggregated and consequently allocated on the project partners
who have exploited them. As already discussed in the introduction to
this chapter, the Pre-D experience has only encompassed the phases
of creation and use of the EPS elements. Only partial exception is the
workflow: given the particular scenario put in place for the plug &
produce proof of concept one can say that its value has been to some
extent renewed.
IDEAS
Pre-D
Lifecycle
Creation
Use
Renewal
MAS
Elements
Skill
Workflow
Platform
WorkStation
Module
Figure 120 IDEAS pre-demonstrator: value proposition and related
stakeholders
The diagram above introduces a simplified view of the allocation
of the Pre-D activities that can set the scene for the forthcoming
elaboration. Nevertheless, as for any joined research project, all the
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
achievements emerged from the common effort of several, if not all,
partners. In this sense it is possible to consider the portrayed
organizations more as leading entity for the activities underlying the
value offerings, rather than the only stakeholder for them. Besides,
the names of the project partners are only presented in order to offer
a seamless connection with the IDEAS project consortium which, in
turn, provides a better reading experience: they are not at all
functional for the forthcoming section.
The nature of the work presented in this dissertation does not
qualify it for a full mathematic validation of the concept;
nevertheless it is possible to individuate a general domain of
applicability of the proposed business models that can be used as
indication for fully featured future industrial applications of the
evolvable paradigm. In principle the validity of a business model
depends on its ability to generate profits for all the stakeholders
involved. With regard to the experience of the IDEAS predemonstrator the layout of theoretically2 necessary business liaisons
for such system is represented in Figure 121.
As mentioned in the previous sections, the Pre-D is the result of joined
research effort co-funded by the IDEAS project partners and the European
Commission, thus there was no trade of hardware and software among the
participant. The depicted scenario has been hypnotized in consequence of
the observed interactions among the organizations involved in the project.
The aim of such conceptualization is only to provide a suitable proof of
concept for this dissertation.
2
283
Chapter 6. Illustration and Validity of the Results
EPS
MAS
supplier
Platform Supplier
End-user
WS Supplier
Module Supplier
Market
Figure 121 IDEAS pre-demonstrator: layout of the conceptual business
relationships
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The following Table 26 details the relationships portrayed
Relationships
Supplier
Object supplied
User
Mech. Agent
1
Uninova
MAS
Festo
Platform
2
Uninova
MAS
Festo
Module
3
Uninova
MAS
Elrest
Workstation
4
Uninova
MAS
IDEAS
EPS system
5
Festo
Module
Elrest
Workstation
6
Festo
Platform
IDEAS
EPS system
7
Elrest
Workstation
IDEAS
EPS system
IDEAS
Final product
Market
-
8
Table 26 Business relationships in the IDEAS Pre-D experience
In the scenario depicted for the IDEAS pre-demonstrator the
Multi-Agent System supplier is part of four business liaisons. In all
four relationships such a stakeholder sits on the supplier side. In
view of the analysis performed the envisaged Architectures of the
Revenue for such a set of links is based on the interfacing economic
activity of licensing the MAS to all the users. The MAS supplier, in
fact, retains the intellectual rights of its product. The pricing method
is based on a customer dependent subscription fee: each user has in
fact customized needs in relation to the MAS. A Platform unit
supplier needs for example the software components related with
the creation of a transport agent while the end-user needs the tools
connected with the development of the workflow. In view of this the
condition of validity of the portrayed business model for the MAS supplier
is represented by the following inequality:
(𝑆
𝑆
𝑆
𝑆
)
(
)
[6.1]
285
Chapter 6. Illustration and Validity of the Results
Where:
𝑆
Subscription fee paid by the production module supplier in
the reference period.
𝑆
Subscription fee paid by the platform unit supplier in the
reference period.
𝑆
Subscription fee paid by the assembly workstation supplier in
the reference period.
𝑆
Subscription fee paid by the end-user in the reference period.
Overall cost3 associated with development and maintenance
of the EPS Multi-Agent System in the reference period
Percentage of profit4 for the MAS supplier
The described business model is valid for the MAS supplier if
the sum of the different subscription fees paid in the reference
period by the MAS users is sufficient to:
1. Cover all the cost associated with the development and
maintenance of the software in the same period.
2. Guarantee an additional payoff equal to
which represents the minimum amount of profit that such
For sake of simplicity this analysis (and the ones performed on the
other stakeholders) refers to all the cost not directly relevant for the core
contribution of this dissertation generically as overall cost. It is in fact out of
the scope of this dissertation to report in detail the advanced cost models
for any OEM. The reader interested in more accurate models for the
traditional production activities can refer to any book of production costing
and economics.
4 Each organization must understand for its own survival which
business ventures are convenient to invest on. Usually companies evaluate
different opportunities and chose the ones that yield potentially higher
profits. For this reason a term has been introduced in relation to each
stakeholder of the Pre-D as a term of comparison with other business
opportunities.
3
286
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
stakeholders must earn in order to deem the described business
appealing.
The platform supplier in this business model is in the
intermediate position of customer of the MAS supplier and supplier
for the EPS end-user. The analized business model is valid for such
stakeholder if the following inequality is fulfilled:
𝑃
(
𝑆
) (
)
[6.2]
Where:
𝑃
Price paid by the end-user for the focal platform unit
𝑆
Subscription fee paid by the platform unit supplier to the MAS
supplier in the reference period.
Fraction of the subscription fee paid to the MAS supplier that
must be allocated on the focal platform unit.
Overall cost associated with the production of a platform unit.
Percentage of profit for the platform unit supplier
The term
has been introduced to allocate the correct fraction
of the subscription fee paid to the MAS supplier on the current
production. Such fee covers in fact all the production units
manufactured, so it must be spread among them accordingly. The
has been introduced to represent the additional percentage of
the cost that the price paid for a platform unit should grant in order
to make the business model proposed appealing for the related
organization.
The following [6.3] is analogous to the [6.2] and it represents the
conditions for validity of the discussed business model in relation to the
production module supplier in the Pre-D scenario. The module
supplier pays to the MAS the subscription fee connected with the
287
Chapter 6. Illustration and Validity of the Results
resource agent development. Another non-influential difference lays
in the fact that such a stakeholder’s customer is the WS supplier
rather than the EPS end-user.
𝑃
(
𝑆
) (
)
[6.3]
Where:
𝑃
Price paid by the workstation supplier for the focal
production module.
𝑆
Subscription fee paid by the production module supplier to
the MAS supplier in the reference period.
Fraction of the subscription fee paid to the MAS supplier that
must be allocated on the focal production module.
Overall cost associated with the production of a production
module.
Percentage of profit for the production module supplier
The workstation supplier is a customer for both the MAS
supplier and the Module supplier. The fee paid for the MAS cover
mostly the aspects related with the integration of the resources
agents into coalitions able to deliver composite skills. The
integration of a workstation requires different modules from
different firms, thus the following inequality [6.4] represents the
condition that must occur in order to make the scrutinized business model
appealing for the WS supplier:
𝑃
288
(
𝑆
∑
𝑃𝑀
) (
)
[6.4]
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Where:
𝑃
Price paid by the end-user for the focal workstation.
𝑆
Subscription fee paid by the workstation supplier to the MAS
supplier in the reference period.
Fraction of the subscription fee paid to the MAS supplier that
must be allocated on the focal workstation.
Total number of production modules composing the focal
workstation.
𝑃
Price paid to the production module supplier for the
module .
Overall cost for the integration of the focal workstation.
Percentage of profit for the workstation supplier
Each workstation in an EPS accomplishes a given assembly task
that can be more or less complicated. The more the composite skill
underlying a workstation is complex the more such a workstation is
likely to cost. On the one hand the number of modules necessary
to fulfill the task is an indicator of the overall complexity. On the
other hand the actual process of integration of the module can be
source of even higher complexity: putting together two specific
modules, can be more demanding than aggregating ten other
simpler modules. In view of this,
accounts, among other things,
also for the complexity of the integration process.
The end-user is the initiator, and thus focal stakeholder, of the
process that brings to an EPS. Such organization exploits the
aforementioned installation to assemble the product that interfaces
the final market with all the firms involved with the development
and use of an EPS. The following inequality [6.5] describes the
condition of validity of the EPS business models for a firm of such
importance.
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Chapter 6. Illustration and Validity of the Results
(
𝑃
)
[6.5]
Where:
𝑃
Price paid by the customer for the one unit of the product
assembled with the focal EPS.
= Cost associated with the evolvable production system.
Other costs, both fixed and variable, associated with the
realization of the final product.
Percentage of profit for the end-user
Sales volume for the product assembled on the focal EPS.
In relation to the business models as defined in this work and
according to the Architectures of the Revenues described above for
the IDEAS pre-demonstrator the
can be detailed as follow:
𝑆
𝑃
∑
𝑃
(
)
[6.6]
Where:
𝑆
Subscription fee paid by the end-user to the MAS supplier in
the reference period
Fraction of the subscription fee paid to the MAS supplier that
must be allocated on the focal workstation.
Total number of workstations composing the focal EPS
Total number of platform units composing the focal EPS. Where,
in turn,
290
⌈ ⌉;
where
number of workstation slots
Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
on each platform unit. An EPS featuring WS will require the
same number of slots to allocate them. In view of this the ratio
between and , increased to the next integer (since the
platform units cannot be split), gives the required amount of
platform units for the focal EPS. In case of the IDEAS predemonstrator
.
𝑃
Price paid to the platform supplier for one platform unit.
Fraction of the price of a platform unit that must be allocated
on the focal EPS
𝑃
Price paid to the workstation supplier for the WS .
Fraction of the workstation price representing the aggregated
residual value of the modules composing the WS after the
end of the focal production5. As seen in inequality [6.4] the
price paid for a workstation includes, among the other things,
also the prices of the composing modules. Such elements can
be reused once the current EPS use phase comes to an end.
Consequently, when calculating the cost for such workstation,
the residual value of the modules must be discounted.
Overall cost for the deployment and configuration of the
focal evolvable production system
The results of the analysis presented hereby have only the
purpose to illustrate how the developed contribution can be used
and consequently which are the limit conditions for such business
model to be valid. Of course the proposed model must be integrated
and modified as the technology gets closer to the market. When this
finally happens the details concerning the envisaged applications
can shape the stakeholders’ relationships and allow putting real
The Pre-D experience has not touched the aspect related with the
transfer of value of the production modules or of the platform units. Thus,
this analysis assumes that the components belong to the end-user that in
fact has paid the full price for them to the respective suppliers.
5
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Chapter 6. Illustration and Validity of the Results
figures in the costing models of each firm in the network. The
feedback from the potential final customer (the market) permits to
assess the intended product price that, in turn, propagates to all the
organizations involved
This proof of concept covers the quantitative leg of the envisaged
validation strategy, namely it answer the question: which are the
prices that ensure sustainability of the proposed network of business model?
The validity of the value proposition itself, namely the qualitative
leg of the validation strategy is conceptually ensured by the fact that
researcher, industry and public investors are interested in the
evolvable paradigm. At this stage of maturity of the EPS technology
these are the relevant stakeholders, not the market. The validity of
the value proposition of an EPS will be further discussed in Chapter
7.
Finally, the introduced findings do not exclude that there could
be better business models to create and capture the same value
proposition. Creating a successful business model is a cyclic activity
that must account for many dynamic factors. Studying the business
model of an innovative technology such as EPS is the useful first
step of this analysis as it fosters the necessary building blocks and it
enables creation of cumulative knowledge for a proficient
concurrent development and alignment of the technical input and
the economic output related to the focal value proposition.
The first part of this chapter introduces and discusses the general
conditions of validity for fully defined business models. This, in
turn, underlines the limitations related to the specific work carried
out in this dissertation and allows devising an ad-hoc validation
strategy for the EPS business models proposed.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
The system chosen for the validation is the currently most
advanced example of evolvable production system: the predemonstrator developed as part of joined research activities within
the IDEAS project. This choice permitted to benefit from the direct
experience of setting up a semi-industrial EPS together with
academic and industrial experts in the field. Although such an
environment is in many ways not comparable with the competitive
scenarios where each business model should be validated, it still
allows disclosing enough evidence in support of the envisaged
business models.
First, the activities and stakeholders connected with the
development of the IDEAS Pre-D have been placed within the
analytical framework used for the description of the EPS business
models. This allowed to explicitly characterise the nature of the PreD business models and the structure of network of relationships
among them. The resulting identified features have then been
embodied in a set of inequalities each representing the condition of
validity of one specific EPS business model related with the IDEAS
pre-demonstrator.
In conclusion this chapter has a two-fold aim: (1) illustrating
how the developed contribution can be used to prove the validity of
the business model related to a non-fully mature and disrupting
technology such as EPS and (2) providing an approach that leads to
the mathematical open solution for the specific EPS business models.
293
This chapter reports on the key findings of this dissertation and
discusses their implication for the focal context. In detail, the first
section summarizes the logical pattern that led from the generic
knowledge gaps individuated in the literature review, to a welldefined target problem and consequent research hypotheses. In the
second part the key contributions of this work are presented and
discussed in relation to their domain of application. This, in turn,
allows providing a rational set of indications regarding future
cumulative research efforts envisaged as necessary steps towards
the full realization of the potential of the proposed approach. Finally
the entire proposed body of knowledge has undergone a critical
review: the result of such a scrutiny and the related final remarks are
detailed in the last paragraph of this chapter.
The main target of this thesis relates to the knowledge gap
behind a logical paradox that thrives within modern manufacturing
firms: while the turbulent market and global competition would
ideally push such organizations towards the adoption of more
sustainable and agile production systems, they seem to overlook the
promising technological innovations that lead toward suitable
solutions. With reference to the domain of industrial assembly
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
automation, one possible explanation for this predicament can be
inferred by accounting for the following aspects of the matter:
I.
II.
III.
The aforementioned innovations (see also Chapter 2) are
not yet technologically mature enough to enter the
automation market: they need further research and
development which must be, in turn, driven by specific
applications.
The envisaged new generation of AAS carries a highly
disruptive potential (as defined by (Christensen, 1997) if
compared to current approaches to industrial
automation. This poses a serious conceptual and practical
barrier between the incumbent firms (as well as the
potential new entrants) and a full understanding of the
potential behind such technology.
Production systems are strategic assets for a
manufacturing organization, thus abrupt large changes in
the production approaches are not likely to fit in the
management’s rational choices: small cumulative
improvements is the usual practice.
The resulting vicious circle can be summarized as follows:
companies need superior production systems but they accept only to
apply ready to use, well-known technologies at shop floor level; so
they refrain from investing in promising new approaches able, in
perspective, to yield the required superior performances; this, in
turn, leaves such innovations underdeveloped. In view of this, the
general problem of how such innovations can be proficiently brought to
market can be solved breaking this undesired chain of events.
This purpose calls for a holistic approach able to frame such
heterogeneous and multifaceted challenge. As (Chesbrough and
Rosenbloom, 2002), among many other authors, noticed, the concept
of business model, if correctly addressed, provides a powerful
means to link the technological input to the economic output related
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Chapter 7. Conclusion and Future Work
to all the activities of a firm. The common denominator is the
concept of Value: a business model tells how such an object is
defined, created and captured by an organization. Although the
business models analyses are usually associated with competitive
analysis on pre-existing markets, this thesis argues that, to a reduced
extent, the building blocks of such a construct can offer a powerful
tool of analysis able to address the problem depicted above. In
particular the full characterization of the current value of an
innovative technology can enlighten patterns towards its fruitful
application.
In view of this the Hypothesis of this work is: the concept of
business model is a valid support to solve the problem of bringing not fully
mature and disruptive innovation to proficient applications in the
production domain. This hypothesis has then been broken into the two
following testable predicates:
1. If it is possible to define a structured model which captures all
the elementary offerings that compose the value proposition of a
not fully mature and disruptive technology, then it is possible
to establish the relative business models. The value
proposition model and related bi-dimensional
investigation tool presented in Chapter 4 addresses this
issue. In detail, it enables a complete characterization of
the value proposition of any technology exploiting an
original bottom up approach.
2. If it is possible to define a model which encompasses all the
elements necessary to translate the identified offerings in a set
of coherent business models able to create and capture the
associated value, then it is possible to solve the problem of
bringing not fully mature and disruptive technology to market.
The description of this EPS business model required a
formal model that is able to accurately represent the
requirement for any business model: describing,
creating and capturing a value proposition. This was
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
addressed with the business model working definition
presented at the beginning of Chapter 5. Such model has
been produced through the aggregation of several
constructs presented in Chapter 2: some of them already
in use and well-established in literature and other newly
defined for the purpose of this work. In particular the
model is based on the following three elements: (1) The
Value Proposition related to the process of describing
the value, (2) the Value Configuration which details the
value creation and (3) the Architecture of the Revenue
connected with the process of capturing the value. These
three building blocks must be determined for each
stakeholder of the focal EPS: the resulting aggregation of
different business model embodies the final contribution
of this work, the EPS production Paradigm Model.
The formulation and consequent investigation of such
hypotheses have been carried out within the European (IDEAS,
2010-2013) project, thus the related evolvable paradigm (see Chapter
2) has provided a specific case study for this dissertation: both the
produced models have been instantiated on this specific innovative
technology.
This thesis has integrated under the umbrella of production
technologies three large and, on a certain extent, heterogeneous
fields of study: (1) disruptive innovation, (2) business models and (3)
level of maturity of a technology. The main aim of this contribution
is providing a better understanding of the possible business
strategies associated with the integration of innovative technology in
automatic production facilities.
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Chapter 7. Conclusion and Future Work
The so called new economy generated in the mid-1990s’ by the
large set of innovations introduced in the field of ICT has, among
other things, highlighted how technological innovation has no
inherent value in itself. Defining the value proposition that such
advancement has in relation to a specific target customer, creating
this value and delivering it in an efficient way are the three
necessary conditions for a proficient exploitation of any innovation.
In other words technological innovation does not lead to profit if not
coupled with a suitable and tailor-made business model.
Consequently, many scholars and practitioners have turned their
attention towards this construct. As result a set of increasingly
sophisticated models aimed at describing and classifying business
model have been proposed in the last decade. A thorough scrutiny
of such contributions allowed to extrapolate a three elements based
definition of business model that provides the necessary resolution to
characterize this construct for a not fully mature and disruptive
innovation. The results and work have shown that this definition
may enable qualitative and quantitative analyses aimed at disclosing
a possible way to the market for the focal technology.
It is important to remark that the actual final optimal
embodiment of an innovative technology into market applications
depends on many different factors which become clear only when
the technology is already in the hands of the final customers. Thus
the findings of this research must be considered more as an
indication of the general pattern underlying a rational
implementation of the evolvable paradigm. This thesis serves such
purpose through a clear definition of the critical aspects that need a
standardized approach across the different stakeholders of an EPS.
The suggested business models may therefore be used to pinpoint
so-called “show stoppers”: gaps and/or missing technologies
needed to achieve the intended goal.
Another important field of analysis in the domain of business
models is the one aimed at assessing the performance of different
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
business models in a given context. Many studies have targeted the
individuation of adjustments that can improve a particular business
model of an actual company in a specific case. Given the nature of
this dissertation, the works that have instead focused on the general
abstract features that render a business model successful provide far
more relevant indications to interpret the results introduced in the
previous chapters. (Weill et al. 2005) in their remarkable study of the
one thousand largest US firms have concluded that selling the right to
use assets is more profitable and more highly valued by the market than
selling ownership of assets. In view of this, the utmost conclusion that
can be drawn from the results of this thesis work is that the EPS
paradigm supports the adoption of better business models for the
stakeholders of an automatic production system. In other words,
the new generation of production systems based on the evolvable
paradigm enable a shift from the traditional business model in
which the production system is owned by the company that uses it to
a more efficient and profitable one that can exploit the financial and
operative flexibility of a solution based on acquiring only the rights
for using such system. This improvement is a direct consequence of
the two main features of an EPS: modularity and distributed control.
Generic and reusable modules that start producing efficiently after
simply being plugged into a standard platform foster, in fact, better
possibilities to easily transfer their value even across different end
users, enabling the sustainability.
With reference to the relationship between (1) disruptive
innovation and (2) business models scholars have provided several
different hypotheses on how, from a purely qualitative point of
view, the disruptive advancements can penetrate the market.
Among them the most interesting ones are presented by
(Christiansen, 1997) which advocates the use of a new specific
market segment that acts as a pivot on the mass of mainstream
customers, and (Utterback and Acee, 2005) that instead see the
innovation first established in the highest end of the existing market
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Chapter 7. Conclusion and Future Work
and then slowly expand to the mass market. Even though this thesis
has not specifically tested these hypotheses, the study performed on
the impact of the EPS paradigm in automatic assembly domain
provides two main indications: on the one hand both scenarios are
not excluded in the proposed model and on the other hand EPS
offers them the possibility to coexist. In detail, the EPS system can
serve already existing markets with new unrequired applications: this
would start a new market indeed, but inside the existing one. This is the
case of companies that could, for example, benefit from agentifying
legacy automation equipment into EPS modules.
An important indirect result of the research presented in this
dissertation is a meaningful characterization of the relationship
between (1) disruptive innovation and (3) level of maturity of a
technology. Namely, a clear understanding of the disrupting
innovation’s potential can trigger and drive the developments which allow
bringing the related technology to full maturity. An example comes from
the computer hard drives market: a full comprehension of the
possible benefit behind remote storage can reroute the research
efforts from building more capable, smaller and lighter disks to
improve internet speed and data security. With reference to EPS (or
any similarly connoted technologies) the business model definition
provides the perfect analytical framework to infer and consequently
describe the disruptiveness related to such innovation.
Consequently, the business model concept offers a valuable support
in driving a technology’s fruitful maturation.
Another relevant issue disclosed by the analysis performed for
this dissertation is related to the influence of the (3) level of maturity
of a given technology on the definition of the related (2) business
model. The final characterization of a business model can be
achieved only when the technology is fully mature and embodied in
the given market. However this thesis suggests that the three
elements which compose a business model are not homogeneously
influenced by the market readiness of the underlying technology. In
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
Technology
Readiness Level
particular the value proposition behind an innovation can be
understood and described with a high level of detail even during
early stages of the technology development. On the other hand, a
significant description of the process connected with the value
creation entails a full specification of the technical solution. The
suitable approach to capture such value can only be fully assessed
when the focal product/service hits the market. Finally, the market
also establishes if the value proposition of the given technology is
appealing and efficiently created in the first place. A graphic
summary of such patterns is presented in the following Figure 122.
Technology Development
Business Model Implementation
Business Model
Proposition
Creation
Capturing
Figure 122 Qualitative influence of the technological maturity of an innovation
on the definition of the three elements of the related business model
The literature analysis performed on the concept of business
model has shown that the stepwise development of an innovative
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Chapter 7. Conclusion and Future Work
technology must be accompanied by a growingly refined strategy
for creating and capturing the potential value that the technology
can yield. Having a clear understanding of the potential value
proposition connected with the development of an innovative
technology is important in order to steer and sustain the process
from the first stages of the research activities. This is, all the more,
fundamental in case the technology is disruptive compared with the
mainstream ones: the risk is that managers, following their
dominant logic (as defined by (Prahalad and Bettis,1986) based on
state of the art they master, will not recognize the potential
opportunities and threats carried by such innovation. (Nelson, 1959)
put the alignment between technological development and
exploitation strategy as a fundamental condition for investing in
research and (Rosenbloom et al. 1996) have remarked how a firm
unable to steadily achieve full profit from R&D will eventually give
up this activity.
The exploitation of the full value proposition behind any
innovation requires the definition of several independent business
models able to create and capture the different value offerings
associated with such technology. The process of decomposing the
superior value proposition in a rational and exhaustive set of value
offerings must account for all the tangible and intangible elements
associated with the focal technology. In addition to that, all the
phases in the lifecycle of each element must be also considered. This
bi-dimensional, spatial-temporal, problem is usually tackled in a topdown fashion: starting from the high level value proposition of a
technology, the analyst builds a plausible exploitation strategy
allocating the necessary tasks and resources according with the
required competencies of the envisaged stakeholders. The direct
contact with the market provides the necessary feedback to tweak
the resulting business plans. This continuous validation mechanism
is not available when a business model’s characterization is
performed at an abstract level. In this case a top down approach
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
may lead to framing the innovation into a pre-existing business logic
rather than explore the universe of possibilities supported by the
focal solution. In order to cope with such risk this work proposed an
alternative bottom-up approach that permits a thorough study
aggregation of the very basic value offerings associated with a new
technology. Each so called Atomic Value Offering is the value
offering associated with one element in one moment of its lifecycle.
Given the results yielded by the application of this analytical
approach on the evolvable production systems, this work suggests
that such a structured method can be a useful support for a truly
effective exploration and characterization of any innovative
technology, in production as well as in other comparably complex
domains.
With reference to the evolvable paradigm, this work shows how
modular production systems built upon distributed control have a
completely different value proposition in respect to the traditional
automatic system based on a rigid integrated architecture and
centralized control. This, in turn, does not mean that they yield
superior performances for all the production scenarios which
require automation. Fixed automation, as well as Flexible
automation, still carries an important value proposition that makes
them attractive for a very large share of industrial applications. For
instance, assembling large volumes of undifferentiated products, or
standard operations such as palletizing can be optimized with less
sophisticated and cheaper approaches to automation. In general one
can say that while the dedicated and the flexible automatic systems
pursue the economies of scale and the economies of scope respectively,
this dissertation describes in detail how an EPS opens the possibility
of exploiting economies of skills. In other words such innovation
allows the users to effectively and nimbly acquire and manage
generic (independent from the application) manufacturing
capabilities which, in turn, enable more sustainable business models.
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Chapter 7. Conclusion and Future Work
The implementation of innovative production technologies will
likely require the creation of new industrial standards. Developing
such standards is per-se a major future endeavor. As often happens
the companies that pioneer the innovation will possibly gain the
higher advantage. As (Teece, 2010) puts it: changing the firm’s
business model literally involves changing the paradigm by which it goes to
market, and inertia is likely to be considerable. Nevertheless, it is preferable
for the firm to initiate such change itself, rather than have it dictated by
external events. This work suggests many areas where future efforts
are required for an effective embodiment of the evolvable paradigm
into automatic assembly solutions.
Given the already quite large scope of this thesis, one important
aspect of the value proposition of an EPS has been only marginally
touched: the potential link between the design of the product and
the design, development and deployment of an EAS. As broadly
discussed along this work and pinpointed by several authors in the
EPS domain (se § 2.1.3), the concept of skills is, in fact, a powerful
bridge between the product’s workflow and the production system.
Assuming that the assembly workflow, as a sequence of skills, could
be dynamically determined in real time while the product is being
designed and according with the features of the design itself: the
EAS paradigm would have realized a fundamental step towards
fully realized parallel/concurrent engineering. Modifying one
dimension on the CAD model of a product would already show the
implications on the real system in terms for example of cost for the
modules performing the related assembly. Of course this requires a
considerable research effort aimed at broadening the scope of the
IDEAS skills in order to encompass the complex domain of the
product. Such goal is currently being investigated by the
aforementioned XPRES initiative and in particular within the FA3
group.
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
One of the essential elements, even for a completely automatic
assembly system, is still the human as configurator, maintainer or
simply supervisor. Once again, a possible approach to this issue
involves the description of the human capabilities within the
framework of EPS skills. This, in turn, would allow describing
humans as elements of the evolvable production system and would
consequently connect them with the proposed formalization of
activities and resources. This also has been underlined as a goal of
the XPRES FA3 group.
The tool used in Chapter 4 for the analysis of the single AVOs of
an evolvable production system provides a general description of
the influence that such basic value offerings have on each other.
Given the initial conditions and the purposes of this dissertation, the
related specification of the nature of such relationships has been
investigated with a qualitative approach. In the limited context of
this work such a way of proceeding is sufficient as the main
requirement was to produce suitable input for the subsequent
analysis. Nevertheless in order to deliver all the potential of this
bottom-up approach for higher levels of technology maturity it is
necessary to further detail and develop the categories of coupling
relationships and precedencies. This would enable a more rigorous
mapping of the examined system’s value offering that, in turn, leads
to a higher resolution in characterizing the necessary business
models. Research in this field is therefore deemed necessary for
bringing such an approach to a more efficient application. Moreover
the bottom-up value proposition’s characterization methodology is
worth being investigated as a stand-alone analytical method in
itself
The analysis performed targeted the conditions of applicability
of EPS under the given assumptions. A promising area that can be
investigated within the business model framework is the one aimed
at disclosing the competitive advantage of EPS technology
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Chapter 7. Conclusion and Future Work
compared to other solutions. In particular, analyzing which market
configurations and which types of production can be a suitable
target of a system developed according to the evolvable paradigm.
New technologies can be introduced in a field by incumbent
firms or newly established, entrant, ones. A large body of
knowledge has been developed in relation to this aspect: some
authors have argued that existing firms have more inertia to change,
others have suggested that they can profit from their existing
structures. In general setting up a new business has different
requirements than evolving an existing one. However, as this work
has been triggered by the observation of the attitude towards
innovative production technologies in well-established firms, the
resulting constructs and models are independent from the particular
status of incumbent or new entrant of a company. A deeper
characterization of this aspect is a valid contribution for bringing
forward the model scope.
One further remark involves the formalism used to describe the
business model. The three elements based definition used in this
work for such a construct is in line with the mainstream descriptive
approaches. However, a full comparison and benchmark with the
other notations available in literature has been left out from this
work. Such a study can trigger the improvement of the resolution of
the descriptive and analytical framework and it is a necessary step
towards a specific formalization of the business model domain in
relation to production science.
Finally, the reviewed literature and consequently Chapter 4
clarified substantial information about the EPS technological
solutions and the potential value connected with it. This, in turn, has
permitted clearing out most of the speculation about the
stakeholders connected with the creation, use and update of such
elements. Unfortunately this is not the case for the activities related
with purchasing and transferring the value associated with the EPS
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
building blocks. More hints on this potential business models might
only come when the EPSs are closer to the market: therefore it will
be beneficial to explore and detail better these lifecycle’s phases in
future works.
The research presented in this dissertation has been carried out
in several, not always seamless, phases during a timeframe spanning
throughout different research projects. This, in turn, has caused a
continuous shift of perspective in the working framework where this
dissertation was being developed. On the one hand this has slowed
down the underlying process of theory building, but on the other
hand such a dynamic environment has contributed to keeping huge
openings for positive faultfinding. The consequent discussions and
feedback have been, together with a constant scrutiny of the research
effort, the iterative shaping force of this thesis. However, given the
scope of this work, some of the related underpinning aspects have
been only partially investigated and assessed to a limited extent.
Most of the resulting critical remarks regarding this work have been
presented along the text when necessary: this section presents the
main remaining open issues in this dissertation.
The outstanding criticism that one can direct to this work lies
within the tool used for the analysis itself: the business model. As
(Teece, 2010) noticed, among the others, the business models concept
remains theoretically underdeveloped, which may raise doubts
concerning its usefulness as a construct for research and theory
building. Moreover even if some of the constructs used in this thesis
as building blocks have been validated through several real
applications and studies performed by other authors, they still have
been developed within the e-business domain, and there are no
previous significant uses of this body of knowledge with a similar
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Chapter 7. Conclusion and Future Work
scope in production science. Nevertheless the assumption that
business models’ current representation tools are useful to clarify
and fruitfully analyze the studied domain has been widely detailed
throughout the thesis. This may also be viewed as a first step in
introducing such decisional approaches in production engineering,
in itself an important contribution as their lack is a contributing
factor to the slow technological progress (in relation to available
technology). Summarizing, the only critical aspect remaining is the
need of a better understanding and testing of the specific
requirement for the representation of business models within the
production domain.
The only judge that can finally validate any business model is
inevitably the market. Given the dynamic and multifaceted nature of
the market, such validity is affected by a set of parameters, often
very difficult to predict if not completely obscure. The mainstream
approach in establishing the suitable business model for a given
value proposition is still based on trial and error. When studying the
business model from a perspective detached from the market
embodiment this is of course not possible. Consequently, the
validation strategy must be based on the identification of a restricted
number of scenarios where such a business model, given some wellmotivated conditions, can yield profits for the connected
stakeholders. This thesis has done so, however with some important
limitation: this work has only focused on the technical aspects related
with the scenarios and a full characterization of the fundamental
economic and financial dimensions of the problem was far beyond the
scope of this dissertation (this would have required a much broader
and multidisciplinary amount of expertise and time).
The most important measure of the quality of a scientific work is
the reliability of the prediction it yields about the future behavior of
the studied object. This thesis has given a logical structure to the
related industrial and scientific input. In this respect one may
conclude that the shown patterns are valid under the specified
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Characterisation of the Business Models for Innovative, NonMature Production Automation Technology
conditions. However this does not completely exclude the
speculative dimension: alternative business models for the same
value proposition might be enabled tomorrow by contingent events.
In general, there is always a risk connected to the exploration of new
domains, but this dissertation can ground the connected findings
into the inherent Markovian nature of technological advancement.
309
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